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D75/100FDD 2025

The Ivy Review — Litigation & Risk

Education - Tutoring & Test Prep · FDD Items 3, 4 & 5

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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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
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
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
California
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status indicates franchisor financial distress or operational instability
  2. 02MINOROnly 8 units systemwide with unknown growth trajectory suggests minimal scale and market validation
  3. 03MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI assessment and comparison
  4. 04MINORExtremely low unit count relative to 10-year franchise term indicates failure to scale or recent contraction
  5. 05MINORMinimal franchise fee ($9,000) combined with unclear profitability model suggests potential survival risk
  6. 06MINOR8% royalty on 'Royalty Income' is ambiguously defined—may not correlate to actual revenue
  7. 07HIGHNo litigation disclosed but Going Concern status suggests underlying financial/operational crises

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.