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A40/100FDD 2025

Raceway — Litigation & Risk

Retail · FDD Items 3, 4 & 5

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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
40 / 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
2
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$110K
Avg loan size
$55K
Participating lenders
2

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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Georgia
State whose law governs disputes — relevant if you're not based there

What drove the 40/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (average unit volumes) disclosed — impossible to assess actual profitability or ROI on $197.5K-$585K investment
  2. 02MINORAnemic unit growth of only 3.5% YoY suggests market saturation, franchisee struggles, or weak brand momentum
  3. 03MINORUnprotected territory creates direct competition risk — franchisor can place new units near existing franchisees without restriction
  4. 04MINORLow fixed royalty ($1,000/month = $12K/year) may indicate weak franchisor support or reliance on underperforming locations
  5. 05MINORWide investment range ($197.5K-$585K) with no revenue disclosure makes it impossible to validate payback period or break-even timeline
  6. 06MINOR5-year term is relatively short; franchisee may struggle to recoup investment before renewal renegotiation

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.