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
64 / 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
2
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$552K
Avg loan size
$276K
Participating lenders
1
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 64/100 rating
Risk Score Breakdown
- 01MINORNo net income disclosure (Item 19) prevents ROI validation; $26,042 average revenue is extremely low relative to $278k-$543k investment
- 02HIGHGoing Concern = False indicates franchisor financial instability or structural issues that could affect support/system viability
- 03MINOR480% YoY unit growth (28 units added in one year) suggests either unsustainable expansion, unreliable reporting, or market saturation risk
- 04MINORHigh 7% royalty on minimal revenue ($26k avg) = $1,820/year royalty on low margins makes profitability highly questionable
- 05MINOR7% royalty on Gross Revenue (not Net) means franchisees pay royalties even in loss months; combined with no profitability data = potential cash flow crisis
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.