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B61/100FDD 2025

Swthz — Litigation & Risk

Health & Wellness - Other · FDD Items 3, 4 & 5

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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
61 / 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
96
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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

What drove the 61/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern warning indicates serious financial distress at franchisor level
  2. 02HIGHTwo active litigation cases including allegations of fraudulent transfer and franchise rights disputes signal operational/legal instability
  3. 03MINORNo average revenue or net income disclosure (Item 19) prevents validation of investment ROI claims
  4. 04MINORExtreme unit growth of 1000% YoY is unsustainable and suggests aggressive expansion without profitability proof
  5. 05MEDHigh initial investment ($569K-$1.2M) combined with undisclosed unit economics creates significant financial risk
  6. 06MINORRecent settlement of HotBox dispute (2022) indicates unresolved franchisor-franchisee relationship issues

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.