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A43/100FDD 2026

Renue® — Litigation & Risk

Lodging - Hotels & Motels · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
43 / 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
9
Government-backed loans issued
Default rate
33.3%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$1.3M
Avg loan size
$141K
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
3 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
Illinois
State whose law governs disputes — relevant if you're not based there

What drove the 43/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Unit Volume) disclosed — unable to assess true profitability or validate the $657,806 avg revenue claim
  2. 02MEDMinimal system growth (4.2% YoY) with only 26 units suggests weak brand momentum and limited proven scalability
  3. 03MINORMonthly royalty minimums ($1,000-$2,500/year 2+) create fixed cost burden regardless of sales performance, problematic for slow-ramp locations
  4. 04MINOR2011 Washington State Consent Order indicates historical compliance issues with franchise disclosure regulations
  5. 05MINORHigh franchise fee ($74,500) relative to small system size and slow growth creates significant sunk cost risk
  6. 06HIGHGoing Concern = False not explicitly stated as positive, creating ambiguity about franchisor financial health
  7. 07MINORAverage revenue of $657,806 on $182,350-$226,200 investment yields only 2.9-3.6x payback, marginal for franchise 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.