Moderate — Review
3 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
57 / 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
40
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
$8.2M
Avg loan size
$204K
Participating lenders
12
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
Massachusetts
State whose law governs disputes — relevant if you're not based there
What drove the 57/100 rating
Risk Score Breakdown
- 01MINORStagnant unit growth (3.0% YoY) indicates weak franchise recruitment and retention in a 34-unit system
- 02MEDNo disclosed average revenue or net income (missing Item 19) prevents validation of financial viability claims
- 03MINORHigh initial investment ($151,600–$615,375) with unknown royalty structure creates opacity around total cost of ownership
- 04HIGHMultiple litigation cases including pending trade secrets dispute, misappropriation settlement with former franchisees, and disclosure omission arbitration suggest governance and transparency issues
- 05MEDSettled arbitration alleging disclosure omissions indicates potential FTC compliance or Item 19 data withholding problems
- 06HIGHGoing Concern status = False, though context unclear—may indicate auditor concerns about franchise system sustainability
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.