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A38/100FDD 2025

Pink Zebra Moving — Litigation & Risk

Business Services - Shipping & Postal · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
38 / 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
12
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$2.1M
Avg loan size
$179K
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
Alabama
State whose law governs disputes — relevant if you're not based there

What drove the 38/100 rating

Risk Score Breakdown

  1. 01HIGHRecent litigation history: Two franchisor-initiated mediations in 2024-2025 suggest operational or compliance disputes
  2. 02MINORWeak unit growth trajectory: 44.4% YoY growth from only 14 units indicates small absolute base and potential volatility
  3. 03MINORLow average net income: $61,711 on $844,608 revenue = 7.3% net margin, leaving minimal cushion after 7% royalty
  4. 04MINORNo Item 19 financial data disclosure creates opacity on actual franchisee profitability claims
  5. 05MINORTiered royalty structure (7%→6%→5%) incentivizes top-line growth over profitability, misaligning franchisor-franchisee interests
  6. 06MINORHigh investment-to-net-income ratio: $131k-$249k startup costs vs. $61k average annual net income = 2.1-4.0 year payback minimum

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.