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A50/100FDD 2024

Spec — Litigation & Risk

Health & Wellness - Other · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
50 / 100
FranchiseVerdict composite
Rating
STRONG
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
52
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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

What drove the 50/100 rating

Risk Score Breakdown

  1. 01MEDNet income not disclosed in FDD Item 19 — unable to validate profitability claims against $1.59M average revenue
  2. 02MEDSlow unit growth of 5.9% YoY with only 36 locations suggests limited scalability or market saturation
  3. 03HIGHLitigation history including franchisor enforcement action and Washington state consent order for unregistered sale indicates compliance and operational issues
  4. 04MINORHigh investment range ($577K–$2.02M) requires strong ROI validation, but profitability metrics are opaque
  5. 05MED15-year term is lengthy commitment with limited exit flexibility given modest system size and growth rate

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.