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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
71 / 100
FranchiseVerdict composite
Rating
CAUTION
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
10
Government-backed loans issued
Default rate
100.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
7 loans
Loans charged off or defaulted
Total loan volume
$1.3M
Avg loan size
$128K
Participating lenders
3
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 71/100 rating
Risk Score Breakdown
- 01MINORUnit count collapsed 30.8% year-over-year (13 units remaining) indicating severe system deterioration and franchisee failure rate
- 02MEDNo Item 19 financial performance data disclosed — impossible to validate if investment can generate positive ROI
- 03MINORRoyalty structure heavily favors franchisor (5% minimum on residential, tiered commercial) with $400-$800 monthly minimums creating cash flow pressure on low-revenue locations
- 04MINORDeclining unit count suggests franchisees are exiting rather than renewing or expanding, indicating poor unit economics
- 05MEDHigh initial investment ($125,850-$181,150) paired with undisclosed profitability creates extreme uncertainty on payback period
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.