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D72/100FDD 2025
The Hot Room — Litigation & Risk
Health & Fitness · FDD Items 3, 4 & 5
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
72 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID
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
Indiana
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial performance data disclosed — impossible to validate ROI on $835k–$1.05M investment
- 02MINOROnly 6 units system-wide with unknown growth trajectory suggests early-stage or stalled expansion
- 03HIGHGoing Concern status is FALSE, indicating potential financial instability at franchisor level
- 04MINORHigh royalty floor of $3,000/week ($156k annually) creates significant break-even threshold regardless of sales performance
- 05MEDNo disclosed average revenue or net income makes it impossible to assess profitability or payback period
- 06MEDFranchise fee ($60k) combined with $3k weekly minimum royalty creates upfront and recurring financial burden with no disclosed unit economics
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.