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Elevated Risk
9 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
9
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
42 / 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
27
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
$18.0M
Avg loan size
$666K
Participating lenders
19
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
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 42/100 rating
Risk Score Breakdown
- 01MINORSlow unit growth of only 5.3% YoY suggests market saturation or system challenges in a mature 366-unit chain
- 02HIGHMultiple active litigation cases including trademark infringement, breach of contract, and landlord disputes indicate franchisor-franchisee relationship tensions and operational control issues
- 03MINORNo Item 19 (Financial Performance Representations) available limits ability to validate the advertised $301,254 average net income across unit types and locations
- 04MEDHigh investment range ($503K-$1M) paired with modest 33% net margin leaves limited buffer for underperformance or economic downturns
- 05MINORTrademark infringement and deceptive trade practice claims suggest brand protection and compliance enforcement challenges
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.