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B61/100FDD 2024

Pets Are Inn — Litigation & Risk

Personal Services - Pet Care · FDD Items 3, 4 & 5

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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
61 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Minnesota
State whose law governs disputes — relevant if you're not based there

What drove the 61/100 rating

Risk Score Breakdown

  1. 01MEDOnly 5 operating units suggests extremely limited franchise system with unclear growth trajectory and viability
  2. 02MINORNo Item 19 financial performance disclosure (Average Net Income not provided) prevents validation of profitability claims despite $262,695 average revenue
  3. 03MINORTiered royalty structure (10%/7.5%/5%) appears designed to obscure total royalty burden—franchisee at $262,695 revenue pays ~$9,826 annually (~3.7% effective rate), creating uncertainty around profitability at different revenue levels
  4. 04MEDHigh franchise fee ($65,000) relative to system size and lack of disclosed franchisor profitability raises questions about business model sustainability
  5. 05HIGHNo disclosed going concern issues but minimal system size and lack of financial transparency creates elevated risk of franchisor instability

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.