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A44/100FDD 2025
The Designery — Litigation & Risk
Business Services - Printing & Signs · FDD Items 3, 4 & 5
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
44 / 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
11
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$2.8M
Avg loan size
$257K
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
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 44/100 rating
Risk Score Breakdown
- 01HIGHActive litigation involving franchisor vs. franchisee with counterclaims of fraudulent misrepresentation raises governance and disclosure concerns
- 02MINORExplosive unit growth of 247.6% YoY suggests either aggressive expansion or acquisition of struggling units, creating sustainability questions
- 03MINORMinimum Monthly Royalty Fee structure (blended 7%-5%) is opaque; actual royalty burden unclear and could significantly impact the stated $172k average net income
- 04MINORHigh ratio of franchise fee ($54,900) to average net income ($172,359.50) means ROI breakeven could take 4+ months even at optimal performance
- 05HIGHGoing Concern flag indicates potential financial stress at franchisor level despite system growth, raising support and viability questions
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.