Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
53 / 100
FranchiseVerdict composite
Rating
STRONG
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
2
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
Total loan volume
$224K
Avg loan size
$112K
Participating lenders
2
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 53/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Average Net Income) disclosed — impossible to validate ROI claims or payback period against $81,750–$230,800 investment range
- 02MINORPrior regulatory violation: Virginia predecessor sold unregistered franchises; 2016 Consent Order required rescission offers and $15,000 penalty, raising compliance and legal risk concerns
- 03MINORAnemic unit growth of 4.7% YoY with only 202 units suggests market saturation or franchisee dissatisfaction in mature system
- 04MEDHigh royalty burden (8% of gross sales) combined with undisclosed profitability means franchisees could be paying substantial fees on thin margins
- 05MINORWide investment range ($81,750–$230,800) indicates high variability in startup costs; unclear what drives the $149,050 spread
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.