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B67/100FDD 2022

Runningboards Marketing — Litigation & Risk

Business Services - Other · 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
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
7
Government-backed loans issued
Default rate
20.0%
vs <3% typical · system-wide
5-yr default rate
20.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$1.2M
Avg loan size
$165K
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
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
New York
State whose law governs disputes — relevant if you're not based there

What drove the 67/100 rating

Risk Score Breakdown

  1. 01MEDNo average revenue or net income disclosed in FDD Item 19 — unable to validate ROI claims or profitability benchmarks
  2. 02MINORExplosive unit growth (550% YoY) with only 14 total units suggests extremely early-stage system with unproven scalability and high failure risk
  3. 03MINORWide investment range ($87,400–$288,500) indicates inconsistent startup costs and unclear value proposition across tiers
  4. 04MINORMinimum royalty floor of $500/month regardless of revenue creates cash flow pressure for underperforming locations
  5. 05MINORMinimal franchisee base (14 units) limits peer network, support infrastructure, and statistical reliability of any performance claims

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.