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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01MINOROnly 1 existing franchise unit indicates brand is pre-revenue or severely underperforming with zero organic growth
- 02MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents ROI validation and suggests weak unit economics
- 03HIGHGoing Concern status is False, indicating potential financial distress or viability questions at franchisor level
- 04MINORWide investment range ($340K-$661K) with no corresponding revenue disclosure suggests undefined unit profitability and unclear cost structure
- 05MINOR5-year term is shorter than industry standard (10 years typical), limiting franchisee ability to recoup investment and build equity
- 06MINORHigh franchise fee ($35K) relative to single operating unit suggests franchisor dependent on fees rather than royalties from thriving units
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.