B65/100FDD 2022
PROSE (Area Representative Business) — Litigation & Risk
Other · FDD Items 3, 4 & 5
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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
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
37
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
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
Arizona
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MEDFinancial performance metrics (revenue, net income) completely undisclosed — unable to validate ROI claims or profitability benchmarks
- 02MINORRoyalty structure unknown — hidden ongoing costs could significantly impact net returns on $55k-$487k investment
- 03MINOROnly 31 units with unknown growth trajectory — small, potentially stagnant system raises scalability and franchisor viability questions
- 04MINORZero territory protection — franchisees face direct internal competition and cannibalization risk within same geographic markets
- 05MINORNo Item 19 financial performance representations — franchisor unwilling to disclose earnings data, suggesting weak unit economics
- 06MINOR$0 franchise fee with wide investment range ($55k-$487k) suggests variable startup costs and unclear cost structure breakdown
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.