FranchiseVerdict
SANFORD ROSE ASSOCIATES logo
A53/100FDD 2026

Sanford Rose Associates — Litigation & Risk

Business Services - Staffing · FDD Items 3, 4 & 5

Back to overview

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
53 / 100
FranchiseVerdict composite
Rating
STRONG
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
14
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$2.4M
Avg loan size
$169K
Participating lenders
6

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
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 53/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 8.7% YoY (157 → 143 units), indicating system contraction and potential market saturation or franchisee dissatisfaction
  2. 02MEDNo Item 19 financial performance data disclosed—impossible to validate profitability claims or ROI expectations for the $11,400-$14,800 investment
  3. 03HIGHPrior litigation: Illinois Attorney General Assurance of Voluntary Compliance (2019) for franchise registration violation suggests compliance/disclosure governance issues
  4. 04MINORDual royalty structure ($10k fixed vs. 5.5% cash receipts) creates ambiguity—unclear which option franchisees actually choose and what average effective rate is
  5. 05MINORVery low franchise fee ($7,500) coupled with non-disclosure of unit economics may indicate low barriers to entry, leading to weak franchisee quality or oversaturation

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.