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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
83 / 100
FranchiseVerdict composite
Rating
AVOID
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
$607K
Avg loan size
$303K
Participating lenders
2
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
1.3 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
Kansas
State whose law governs disputes — relevant if you're not based there
What drove the 83/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 14.3% YoY (24 units), indicating contracting system and potential franchisee struggles
- 02MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents ROI validation and profitability assessment
- 03HIGHTwo litigation events within 5 years including 2022 California regulatory action for unregistered sales and consent order, suggesting compliance issues
- 04HIGHGoing Concern status is False, indicating auditor concerns about company's ability to continue operations
- 05MINORWide investment range ($128K-$702K) with no average revenue disclosure makes unit economics opaque and risk assessment impossible
- 06MINOR5% royalty on weekly gross sales creates ongoing cash drain without visibility into actual franchisee net profitability
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.