Moderate — Review
3 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
54 / 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
1
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
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
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 54/100 rating
Risk Score Breakdown
- 01MEDNo disclosed average revenue or net income (Item 19) prevents ROI validation; unable to assess whether $47k-$227k investment generates acceptable returns
- 02HIGHMultiple litigation actions including trade secrets violation (2022), no-poach settlement (2019), and antitrust commission lawsuit (2024) suggest systemic compliance and competitive practice issues
- 03MEDModest unit growth of 7.9% YoY combined with 422 total units indicates small, slower-scaling system with limited network effects and market presence
- 04MINORNo territorial protection exposes franchisees to direct competition from other brand agents and internal cannialization of deal flow
- 05MINORWide investment range ($47k-$227k, 4.8x spread) with no transparent fee structure or what determines pricing tier; suggests inconsistent franchisee economics
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.