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D77/100FDD 2025

Snapology — Litigation & Risk

Education - Children's Programs · FDD Items 3, 4 & 5

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Moderate — Review

4 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
77 / 100
FranchiseVerdict composite
Rating
CAUTION
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
12
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$1.9M
Avg loan size
$160K
Participating lenders
8

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
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 77/100 rating

Risk Score Breakdown

  1. 01MEDNo average net income disclosed despite $157k average revenue—unclear actual profitability and return on $75-195k investment
  2. 02HIGHMultiple litigation cases involving franchisor affiliates (Maryland Securities, UATP, Class 101, Premier Martial Arts) suggest corporate governance and compliance issues
  3. 03MINORRoyalty structure (greater of 7% or minimum fee) is opaque—minimum fee amount not specified, creating hidden cost uncertainty
  4. 04MINORModest unit growth (17.6% YoY on only 121 units) is solid but insufficient to offset profitability opacity
  5. 05HIGHGoing Concern: False status indicates franchisor does not assert business continuity confidence

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.