Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 63/100 rating
Risk Score Breakdown
- 01MEDNo average revenue or net income disclosed in FDD (Item 19 missing or inadequate) — cannot validate ROI claims
- 02HIGHAffiliate litigation in 2014 involving unlawful franchise sale after registration lapsed suggests compliance/governance concerns
- 03MINORUnprotected territory creates direct competition risk — franchisees can cannibalize each other's revenue
- 04MEDMinimum royalty fee structure not disclosed — unknown fixed cost burden could eliminate profitability at lower revenue levels
- 05MINORExplosive unit growth (212.5% YoY) on only 25 units is unsustainable and may indicate recruitment-heavy model rather than organic growth
- 06HIGHGoing Concern = False is ambiguous — clarify whether franchisor has undisclosed financial distress
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.