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B63/100FDD 2023

Stride — Litigation & Risk

Health & Fitness · 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
63 / 100
FranchiseVerdict composite
Rating
MODERATE
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
9
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
50.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$3.5M
Avg loan size
$388K
Participating lenders
7

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
California
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Net Income) disclosed — impossible to assess true profitability against $379k-$554k investment
  2. 02HIGHGoing Concern status is False — suggests franchisor financial instability or regulatory issues
  3. 03MINOROnly 18 units system-wide with 70% YoY growth appears inflated from very small base (likely 10-11 units prior year)
  4. 04MINORHigh royalty rate (7%) on modest average revenue ($309k) creates thin margin risk
  5. 05MINORFranchise fee ($60k) represents 15.8-18% of total investment — typical is 10-12%
  6. 06MINORAverage revenue of $309k with unknown profitability makes ROI calculation impossible

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.