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
59 / 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
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Nevada
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MINORNo net income disclosure (Item 19) prevents ROI validation despite $103k average revenue
- 02HIGHGoing Concern status is FALSE, indicating potential financial instability or undisclosed material weaknesses
- 03MINORWide investment range ($31.3k-$129.7k) suggests inconsistent unit economics or unclear cost structure
- 04MINORMinimum royalty of $250/month ($3,000/year) creates floor burden even for underperforming locations
- 05MINORRapid YoY growth (61.1%) may indicate unsustainable expansion or inflated recruitment over profitability
- 06MEDOnly 29 total units is a very small franchise system with limited survival track record
- 07MINOR5-year term is shorter than industry standard (10 years), increasing renewal uncertainty
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.