FranchiseVerdict
Retrofitness logo
D72/100FDD 2025

Retrofitness — Litigation & Risk

Health & Fitness · FDD Items 3, 4 & 5

Back to overview

Moderate — Review

5 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
29
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$29.3M
Avg loan size
$1.0M
Participating lenders
17

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 72/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 5.8% YoY (82 units) suggests system contraction and potential franchisee struggles
  2. 02MINORMultiple class action and individual lawsuits involving NJ consumer protection, health club law violations, and franchise agreement breaches indicate systemic operational or compliance issues
  3. 03MINOR$600,000 arbitration settlement indicates material disputes between franchisor and franchisees
  4. 04MEDNet income not disclosed despite $1.19M average revenue—suggests profitability concerns or reluctance to disclose underperformance
  5. 05HIGHHigh initial investment ($2M–$3.2M) combined with declining unit count and litigation creates elevated failure risk
  6. 06MINORNo Item 19 (financial performance representations) limits ability to validate franchisee earning claims
  7. 07MINOR5% royalty on gross sales (not net) increases burden during revenue downturns—common in declining systems

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.