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B62/100FDD 2025

SafeSplash Swim School — Litigation & Risk

Education - Tutoring & Test Prep · 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
62 / 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
31
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
$36.9M
Avg loan size
$1.2M
Participating lenders
14

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
Colorado
State whose law governs disputes — relevant if you're not based there

What drove the 62/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 12.6% YoY (119 units) indicates system contraction and potential franchisee dissatisfaction
  2. 02HIGHActive litigation involving alleged sexual assault creates severe liability exposure and reputational risk for all franchisees
  3. 03MINORHigh initial investment range ($24K-$1.48M) with wide variance suggests inconsistent unit economics and unclear scaling model
  4. 04MINOR6% royalty on $1.1M average revenue = ~$66K annual royalty burden reduces net income from $259K baseline
  5. 05MINORNo Item 19 financial performance data limits ability to validate average revenue/income claims across unit types
  6. 06HIGHFranchisor indemnification counterclaim suggests potential liability shift to franchisees in litigation scenarios

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.