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D72/100FDD 2025

@properties — Litigation & Risk

Real Estate · FDD Items 3, 4 & 5

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Elevated Risk

10 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
10
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 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
Illinois
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MED25% unit decline YoY (44 units) indicates systemic franchisee attrition and loss of confidence in the model
  2. 02MINORNo Item 19 financial disclosure (avg revenue/net income) prevents ability to validate ROI on $64k-$433k investment
  3. 03MEDMultiple antitrust class actions (6+) targeting real estate commission structures create regulatory/legal risk to core business model
  4. 04HIGHGoing Concern = False signals potential franchisor financial distress or viability concerns
  5. 05HIGHHigh litigation exposure across professional liability, fraud, and failure-to-disclose claims suggests operational/compliance issues within franchisee network
  6. 06MINORWide investment range ($64k-$433k) with no corresponding revenue disclosure raises questions about unit economics transparency

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.