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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
72 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01MINOROnly 3 operating units indicates extremely small, unproven system with minimal track record
- 02MEDNo average revenue or net income disclosed — inability or unwillingness to provide Item 19 is major red flag
- 03HIGHGoing Concern status is FALSE, suggesting potential financial viability concerns at franchisor level
- 04MINORHigh initial investment ($151,700-$214,500) paired with opaque financial performance creates severe ROI uncertainty
- 05MINORAmbiguous royalty structure ('greater of 4% or minimum fee') lacks transparency — minimum fee amount unknown
- 06MEDNo disclosed system growth trajectory; 3 units could indicate stagnation or contraction
- 07MINOR10-year term locks franchisee into relationship with unproven franchisor model
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.