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B55/100FDD 2026

Story Time Chess — Litigation & Risk

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

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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
55 / 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
Tennessee
State whose law governs disputes — relevant if you're not based there

What drove the 55/100 rating

Risk Score Breakdown

  1. 01MINOROnly 5 units system-wide with unknown/stagnant growth trajectory indicates minimal scale and market validation
  2. 02MINORNo Item 19 (Average Net Income) disclosure prevents ROI assessment; $55.6K-$76K investment lacks profitability transparency
  3. 03MINORUnprotected territory creates direct competition risk—multiple franchisees could operate in same market, cannibalizing $580.8K average revenue
  4. 04MINOR7% royalty on declining revenue base plus $200/week minimum ($10.4K annually) creates significant fixed cost burden with thin margins
  5. 05MINOR5-year term is short; franchisor reinvestment commitment and long-term viability unclear with such a micro-system
  6. 06HIGHNo disclosed litigation history in such small system may indicate lack of transparency rather than absence of disputes

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.