F87/100FDD 2025
Snap Fitness — Litigation & Risk
Health & Fitness · FDD Items 3, 4 & 5
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
87 / 100
FranchiseVerdict composite
Rating
AVOID
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
265
Government-backed loans issued
Default rate
11.6%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
26 loans
Loans charged off or defaulted
Total loan volume
$44.6M
Avg loan size
$168K
Participating lenders
124
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
Minnesota
State whose law governs disputes — relevant if you're not based there
What drove the 87/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 5.1% YoY (493 units) indicates system contraction and potential market saturation or operational failures
- 02HIGHMultiple active litigation cases involving breach of contract, non-compete violations, unjust enrichment, and class action suits suggest systemic franchisor-franchisee relationship problems
- 03MINORNet income of $89,439 on average revenue of $250,461 (35.7% margin) is modest for a fitness franchise requiring $430K-$1.1M investment with high operational overhead
- 04MINORRecurring monthly royalty of $700 combined with declining unit economics creates cash flow pressure in declining revenue environment
- 05MEDNo Item 19 (Financial Performance Representations) disclosed limits ability to validate franchisor's revenue/profitability claims
- 06HIGHMultiple litigation themes (management software disputes, enhancement fees, non-competes) indicate franchisor may impose undisclosed costs and restrict franchisee autonomy
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.