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A47/100FDD 2024

The Goddard School — Litigation & Risk

Education - Children's Programs · 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
47 / 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
538
Government-backed loans issued
Default rate
3.4%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
8 loans
Loans charged off or defaulted
Total loan volume
$999.5M
Avg loan size
$1.9M
Participating lenders
81

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
3 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
Pennsylvania
State whose law governs disputes — relevant if you're not based there

What drove the 47/100 rating

Risk Score Breakdown

  1. 01MINORHigh initial investment range ($902.5K–$8.5M) with wide variance suggests inconsistent unit economics or market-dependent costs
  2. 02MINORUnprotected territory creates direct competition risk and limits franchisee exclusivity; unclear how many units can operate in same area
  3. 03HIGHActive litigation (Pond Road case) involving fraud/misrepresentation allegations against Goddard Manager, even if dismissed without prejudice, signals operational or disclosure concerns
  4. 04MINORSlow unit growth (4.8% YoY) in childcare sector suggests market saturation, franchisee underperformance, or brand stagnation relative to competitors
  5. 05MINORHigh royalty burden (7% of gross receipts) on average $2.28M revenue = ~$160K annual royalty, compressing net margins (currently ~22% net on gross revenue)

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.