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
MODERATE
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
No
Franchisor can match any purchase offer when you try to sell
Governing law
California
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial disclosure (Average Revenue and Net Income not disclosed) — inability to validate ROI claims or benchmark performance
- 02MEDExtremely small system with only 8 units — indicates minimal brand recognition, limited operational track record, and higher failure risk
- 03MINORUnknown unit growth trajectory — no clarity on whether system is expanding, stagnant, or contracting
- 04MINORHigh royalty burden with $3,000 monthly minimum ($36,000 annually) regardless of revenue — creates cash flow risk for underperforming locations
- 05HIGHGoing Concern status is False — suggests the franchisor entity may have capital constraints or operational instability
- 06HIGHNo disclosed litigation history — either legitimately clean or potentially undisclosed disputes; unclear without FDD verification
- 07MINORWide investment range ($105,500–$169,500) without breakdown — suggests inconsistent startup costs or lack of standardized operations
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.