Elevated Risk
2 cases disclosed in FDD Items 3 and 4. Bankruptcy disclosed in Item 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)
- Disclosed
- Franchisor or officer bankruptcy
- Verdict score
- 40 / 100
- FranchiseVerdict composite · higher is better
- Rating
- C
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off 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
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- N/A
- 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
Extracted from FDD Item 3
Litigation Detail
1 case reference(s): 0 pending, 0 settled.
What drove the 40/100 verdict
Risk Score Breakdown
- 01MINORRegulatory consent order (CA DFPI 2022) - worse than routine suit
- 02HIGHCEO personal Chapter 7 bankruptcy (2024, discharged) - officer-level, recent
- 03MINORNo Item 19 disclosure
- 04MINORSharp unit contraction -29.4% across small 24-unit system
- 05MINORMitigants: positive net income $107,434, audited
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.