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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
67 / 100
FranchiseVerdict composite
Rating
MODERATE
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
8
Government-backed loans issued
Default rate
37.5%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$2.2M
Avg loan size
$270K
Participating lenders
3
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
1.5 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
Arizona
State whose law governs disputes — relevant if you're not based there
What drove the 67/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 2.9% YoY (34 units) — suggests system contraction or franchisee struggles
- 02MINORNo Item 19 financial disclosure — unable to verify revenue/profitability claims; major transparency gap
- 03MEDRoyalty rate undisclosed — potential hidden cost structure or ongoing negotiation issues
- 04MINORHigh franchise fee ($85,750) relative to small unit base — may indicate franchisor dependent on upfront fees rather than system health
- 05HIGHNo 'going concern' statement — suggests franchisor stability not independently verified in disclosure documents
- 06MINORWide investment range ($98,725–$221,175) with no clear cost breakdown — budget uncertainty and hidden costs likely
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.