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B59/100FDD 2025

SpiderSmart Learning — Litigation & Risk

Education - Tutoring & Test Prep · FDD Items 3, 4 & 5

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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
59 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
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
Virginia
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MINORNo financial performance disclosure (Item 19) — cannot assess actual franchisee profitability against $79,900-$139,400 investment
  2. 02MED2015 Maryland Securities Commissioner Consent Order for unregistered franchise sales indicates regulatory compliance issues in franchisor's past
  3. 03MEDSlow unit growth (11.8% YoY on only 19 units) suggests limited system traction and market appeal
  4. 04MINORHigh floor royalty ($1,500/month = $18,000 annually) creates significant fixed cost burden even if revenue is low
  5. 05MINOR10-year term locks franchisees into long commitment with minimal system track record or profitability proof
  6. 06MINORMinimal franchise fee ($30,000) may indicate franchisor prioritizes recruitment over franchisee success, combined with regulatory history

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.