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
59 / 100
FranchiseVerdict composite
Rating
MODERATE
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 59/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is False — indicates potential financial distress or operational uncertainty at franchisor level
- 02MEDNo Item 19 (Average Net Income) disclosed — impossible to validate $873,670 average revenue claims or assess actual profitability
- 03MINORRegulatory enforcement action (CA DFPI Consent Order) for selling unregistered franchises 2013-2018 — demonstrates compliance/governance issues
- 04MINORRoyalty fee structure Unknown — hidden or variable fee model suggests opaque cost structure for franchisees
- 05MINOR47 total units with 19% YoY growth is modest in mature market — slower expansion may indicate saturation or difficulty scaling
- 06MINORZero franchise fee creates misaligned incentives — franchisor has minimal financial commitment to franchisee success
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.