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F85/100FDD 2026

SelectQuote Local — Litigation & Risk

Business Services - Tax & Financial · FDD Items 3, 4 & 5

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Moderate — Review

5 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
85 / 100
FranchiseVerdict composite
Rating
AVOID
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 85/100 rating

Risk Score Breakdown

  1. 01MINORParent company has five active lawsuits including three securities class actions alleging misleading statements to investors—signals potential systemic misrepresentation culture
  2. 02MINORDOJ qui tam action alleging improper sales and marketing practices directly threatens franchise sales model and could trigger regulatory enforcement
  3. 03HIGHGoing Concern note = False indicates auditors questioned parent company's ability to continue operations; franchisees depend on corporate support infrastructure
  4. 04MINOROnly one known franchisee unit with unknown growth trajectory suggests system is pre-revenue, unproven, or collapsing
  5. 05MEDNo average revenue or net income disclosed in FDD—inability or unwillingness to provide Item 19 financial performance represents maximum transparency risk
  6. 06MINOR20-30% royalty rate is exceptionally high (industry norm: 5-8% for insurance) while franchisee profitability data is completely absent
  7. 07MINORNo protected territory means franchisee competes against company-owned units, other franchisees, and direct-to-consumer operations with no geographic safeguards
  8. 08HIGH10-year term locks franchisee into relationship with litigation-plagued parent company through 2034 with minimal exit options

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.