Elevated Risk
11 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 11
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 39 / 100
- FranchiseVerdict composite · higher is better
- Rating
- C
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 406
- Government-backed loans issued
- Charge-off rate
- 11.8%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 36 loans
- Loans charged off or defaulted
- Total loan volume
- $646.1M
- Avg loan size
- $1.6M
- Participating lenders
- 129
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
- No
- Franchisor can match any purchase offer when you try to sell
- Governing law
- New Jersey
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
11 case reference(s): 1 pending, 0 settled.
What drove the 39/100 verdict
Risk Score Breakdown
- 01HIGH16 litigation matters (parent/system-wide hotel chain)
- 02MINORSystem contracting -11.5%, turnover 10.9%
- 03MINORHistorical FTC data-security settlement noted
- 04HIGHNo bankruptcy, no going-concern, audited, Item 19 disclosed
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.