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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
40 / 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
2
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$300K
Avg loan size
$150K
Participating lenders
1
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 40/100 rating
Risk Score Breakdown
- 01MINORExtremely aggressive unit growth (200% YoY) with only 9 total units suggests either cherry-picked data or unsustainable expansion trajectory
- 02HIGHNo Item 19 (Going Concern = False) prevents validation of the $1.8M average revenue claim—actual franchisee performance is unverified
- 03MINORHigh initial investment ($167K–$233K) combined with 7% royalty requires strong sales velocity; growth rate may not be sustainable long-term
- 04MINORSmall unit count (9 franchises) creates statistical unreliability and limits peer learning/support network
- 05MINOR200% YoY growth raises questions about franchisor focus: are they managing current franchisees or prioritizing recruitment?
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.