FranchiseVerdict
Patrice & Associates logo
F82/100FDD 2025

Patrice & Associates — Litigation & Risk

Business Services - Staffing · FDD Items 3, 4 & 5

Back to overview

Moderate — Review

4 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
82 / 100
FranchiseVerdict composite
Rating
AVOID
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
95
Government-backed loans issued
Default rate
33.3%
vs <3% typical · system-wide
5-yr default rate
25.0%
Defaults
14 loans
Loans charged off or defaulted
Total loan volume
$12.5M
Avg loan size
$132K
Participating lenders
7

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Delaware
State whose law governs disputes — relevant if you're not based there

What drove the 82/100 rating

Risk Score Breakdown

  1. 01MEDStagnant unit growth (0.5% YoY) indicates system decline or saturation with 189 units showing minimal expansion momentum
  2. 02HIGHHistory of litigation including concluded misrepresentation/breach claims plus pending fraudulent inducement lawsuit alleging failure to disclose earnings
  3. 03MEDCritical absence of Item 19 financial performance data — average revenue of ~$19K is suspiciously low and net income entirely undisclosed, preventing ROI validation
  4. 04MEDHigh initial investment ($105-121K) relative to disclosed average revenue ($18,976) creates immediate profitability concerns and extended break-even timeline
  5. 05MINOR10% royalty on gross sales is extracted regardless of profitability, and with average net income withheld, true take-home pay is opaque
  6. 06MINORPending Sweeney lawsuit specifically alleges failure to disclose earnings — red flag for systemic earnings misrepresentation to franchisees

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.