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D69/100FDD 2023

Skill Samurai — Litigation & Risk

Education - Tutoring & Test Prep · 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
69 / 100
FranchiseVerdict composite
Rating
CAUTION
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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 69/100 rating

Risk Score Breakdown

  1. 01MINOROnly 6 units in system with 500% YoY growth suggests extremely early-stage franchise model with unproven scalability and potentially unsustainable growth claims
  2. 02MINORNo average revenue or net income disclosure (Item 19) prevents prospective franchisees from validating realistic financial projections and ROI
  3. 03MINORHigh initial investment range ($74,615–$307,950) combined with lack of performance data creates significant blind-spot risk
  4. 04MINORMinimum $500/month royalty (7% or greater) begins month 7, creating immediate cash flow pressure before unit reaches profitability
  5. 05HIGHGoing Concern status is False, indicating potential financial instability or viability concerns at franchisor level
  6. 06MEDMicro-system size (6 units) means limited peer network, support infrastructure, and ability to absorb franchisee failures

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.