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D72/100FDD 2025
Tax Tiger — Litigation & Risk
Business Services - Tax & Financial · FDD Items 3, 4 & 5
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
72 / 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
4
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
$1.3M
Avg loan size
$321K
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
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
State where Office is located
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01MINOROnly 3 units in system with unknown/likely stagnant growth indicates minimal market validation and weak franchise model scalability
- 02MINORNo Item 19 (average revenue/net income) disclosure prevents assessment of actual franchisee profitability and ROI on $198K-$665K investment
- 03HIGHGoing Concern flag = false suggests potential financial instability at franchisor level, raising doubts about support, marketing, and system longevity
- 04MINOREscalating royalty minimums ($1K → $2K → $3K) create cash flow burden in early years when new locations typically underperform
- 05MEDHigh initial investment range ($467K spread) with no disclosed unit economics means franchisees cannot model realistic break-even timelines
- 06MED6% royalty on undisclosed revenue streams means franchisees have no benchmark to evaluate whether their sales are healthy vs. system average
- 07MINORExtremely young/small franchise system (3 units) lacks maturity, proven operations playbook, and franchisee referenceability
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.