FranchiseVerdict
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B65/100FDD 2025

recoveriX — Litigation & Risk

Other · 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
65 / 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
New York
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MEDZero disclosed franchise units with unknown growth trajectory indicates either brand-new system or undisclosed contraction
  2. 02MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation against $72K-$352.5K investment range
  3. 03MINOR11% royalty rate is above-market for wellness/therapy franchises, reducing margins without proven unit economics
  4. 04MINORWide investment range ($280.5K spread) suggests inconsistent startup costs or undefined territory/build-out standards
  5. 05HIGHGoing Concern status with zero operating units raises sustainability and franchisor financial stability questions
  6. 06MINOR5-year term is shorter than industry standard (10 years), indicating higher renewal/renegotiation risk

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.