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CAverage65/100FDD 2025

Season 2: Litigation & Risk

Business Services · 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
65 / 100
FranchiseVerdict composite
Rating
C
A / B / C / D / F verdict grade

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 65/100 rating

Risk Score Breakdown

  1. 01MEDNet income not disclosed in Item 19 — unable to assess actual profitability despite $218k average revenue
  2. 02MINORRoyalty structure heavily favors franchisor ($150/week minimum = $7,800/year even at $0 sales) — creates cash flow pressure on struggling units
  3. 03MINORExtremely small system (9 units) with 100% YoY growth likely means expansion from 4-5 units — lacks scale and stability data
  4. 04HIGHGoing Concern status is FALSE — potential financial instability or accounting issues at corporate level
  5. 05MINORHigh initial investment ($188k-$276k) combined with unknown profitability creates elevated risk of negative ROI
  6. 06HIGHNo litigation disclosed but system size too small for meaningful legal history assessment

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.