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)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 73 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 15
- Government-backed loans issued
- Charge-off rate
- 0.0%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 0 loans
- Loans charged off or defaulted
- Total loan volume
- $3.9M
- Avg loan size
- $257K
- Participating lenders
- 5
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
- NC
- State whose law governs disputes. Relevant if you're not based there
What drove the 73/100 verdict
Risk Score Breakdown
- 01MINORUnit count collapsed 60% YoY (58 units remaining) — indicates severe system deterioration
- 02MINORNo net income disclosure — unable to assess actual franchisee profitability despite $1.2M average revenue
- 03MINORNo territory protection — franchisees face direct competition from other PayMore locations
- 04MINORHigh ongoing royalty floor of $1,000/month (~$12,000 annually) with no guaranteed minimum revenue
- 05MEDSubstantial investment range ($131,750-$256,500) with no disclosed Item 19 financial performance data
- 06HIGHGoing Concern status is False — potential financial instability at franchisor level
- 07MINOR15-year term locks franchisees into declining system with minimal flexibility
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.