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B58/100FDD 2024

The Little Gym® — Litigation & Risk

Health & Fitness · FDD Items 3, 4 & 5

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Elevated Risk

81 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
81
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
58 / 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
385
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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

What drove the 58/100 rating

Risk Score Breakdown

  1. 01HIGHExtensive litigation history involving franchisor and parent company (Unleashed Brands) with fraud and misrepresentation claims raises credibility and trustworthiness concerns
  2. 02MINORSlow unit growth (6.9% YoY) with 186 total units suggests market saturation or franchisee satisfaction issues in a children's fitness category
  3. 03MINORNo Item 19 (Financial Performance Representations) disclosure limits ability to validate the $215k average net income claim independently
  4. 04HIGHGoing Concern status is FALSE, indicating potential financial instability at franchisor level that could affect support and system viability
  5. 05MINORHigh royalty floor of $2,500/month ($30k annually) creates significant fixed costs that may exceed 8% royalty for lower-revenue locations
  6. 06MINORInitial investment of $506k-$673k is substantial for a children's fitness concept with unproven ROI transparency

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.