FranchiseVerdict
Sunbelt Business Brokers logo
B58/100FDD 2025

Sunbelt Business Brokers — Litigation & Risk

Real Estate · FDD Items 3, 4 & 5

Back to overview

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
58 / 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
6
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$5.0M
Avg loan size
$837K
Participating lenders
5

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

What drove the 58/100 rating

Risk Score Breakdown

  1. 01MEDNo average revenue or net income disclosed in FDD (Item 19) — impossible to assess ROI or validate $61-114k investment viability
  2. 02MINORUnprotected territory creates direct competition risk — multiple franchisees can operate in same area with no exclusivity
  3. 03MINORSlow unit growth (6.6% YoY) on 130-unit system suggests market saturation or franchisee dissatisfaction
  4. 04MINORHigh initial franchise fee ($49,500) represents 81% of minimum investment with no guaranteed performance metrics
  5. 05MED4% monthly royalty + undisclosed marketing fee structure lacks transparency on total cost of revenue

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.