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B57/100FDD 2025

Resting Rainbow — Litigation & Risk

Personal Services - Pet Care · 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
57 / 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
214
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
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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 57/100 rating

Risk Score Breakdown

  1. 01MINOROnly 3 units in system with unknown growth trajectory suggests early-stage or stalled expansion
  2. 02HIGHGoing Concern status is FALSE — potential financial instability or viability questions at corporate level
  3. 03MINORHigh royalty floor of $1,500/month ($18,000 annually) creates cash flow pressure even during slow revenue periods
  4. 04MINORNo Item 19 financial performance representation — cannot independently verify claimed $658k avg revenue or $221k net income
  5. 05MINORDual royalty structure (7% or $1,500 minimum) heavily favors franchisor on lower-revenue units, limiting franchisee upside
  6. 06MEDExtremely limited franchisee base (3 units) makes validation and peer support network minimal

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.