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
49 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID
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
No
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 49/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Average Net Income) disclosed — impossible to assess actual profitability despite $350K average revenue
- 02MINOR22% royalty rate is substantially high, reducing net margins significantly on ~$350K average revenue
- 03HIGHGoing Concern status is False — suggests the franchisor may have liquidity or operational sustainability issues
- 04MINORRapid unit growth (44.4% YoY) without profitability transparency raises quality-of-growth concerns and potential oversaturation risk
- 05MINORWide investment range ($14,050–$68,000) indicates inconsistent territory valuations or undefined startup costs
- 06MEDOnly 26 units system-wide — limited track record and small sample size for validating business model viability
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.