Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
57 / 100
FranchiseVerdict composite
Rating
MODERATE
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
20
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
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 57/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status indicates financial distress or operational instability at franchisor level
- 02MEDOnly 8 units system-wide suggests minimal scale, limited support infrastructure, and high failure risk
- 03MEDNet income not disclosed in Item 19 prevents ROI validation — cannot verify if $1.54M average revenue generates acceptable profit after 7% royalties and operating costs
- 04MINORHigh initial investment range ($880K–$1.53M) creates significant exposure with unproven unit economics
- 05MINORUnknown unit growth trajectory indicates stagnant or declining system; no evidence of expansion or franchisee success replication
- 06MINORMinimal franchise fee ($60K) relative to total investment suggests franchisor relies heavily on royalties, creating misaligned incentives
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.