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B61/100FDD 2025

The Joint Chiropractic — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
61 / 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
199
Government-backed loans issued
Default rate
3.7%
vs <3% typical · system-wide
5-yr default rate
6.2%
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$55.8M
Avg loan size
$280K
Participating lenders
44

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
1.5 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
Arizona
State whose law governs disputes — relevant if you're not based there

What drove the 61/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 4.2% YoY (27 units total) indicates shrinking system and potential market saturation or unit underperformance
  2. 02MINORExceptionally high royalty rate of 42.957% severely limits franchisee profitability and cash flow compared to industry standard of 5-7%
  3. 03MEDNo average revenue or net income disclosure (missing Item 19) prevents prospective franchisees from validating investment ROI claims
  4. 04MINORPrior $800,000 arbitration settlement with franchisees regarding development schedules suggests franchisor-franchisee relationship strain and unmet expectations
  5. 05MINORHigh initial investment of $166,225–$551,350 combined with declining unit count and high royalties creates significant breakeven risk
  6. 06MINORSmall franchise system (27 units) limits brand recognition, purchasing power, and operational support infrastructure

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.