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A36/100FDD 2026

TeamLogic IT — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
36 / 100
FranchiseVerdict composite
Rating
STRONG
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
60
Government-backed loans issued
Default rate
7.7%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$18.9M
Avg loan size
$314K
Participating lenders
20

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 36/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Unit Volume) disclosed despite $1.28M average revenue claim — unable to verify profitability or typical franchisee earnings
  2. 02MINORRegulatory violation in January 2024 for failing to maintain required salesperson disclosures in California, indicating compliance lapses in franchise sales documentation
  3. 03MINOR10.6% YoY unit growth is modest for a 344-unit system and may indicate slowing expansion or market saturation concerns
  4. 04MEDHigh royalty rate of 7% on gross sales (not net profit) creates earnings pressure, especially given undisclosed net income figures
  5. 05MINORInitial investment range of $109.7K–$145K is substantial for an IT services franchise with no earnings transparency to justify ROI

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.