A50/100FDD 2025
The New Mom School — Litigation & Risk
Education - Tutoring & Test Prep · 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
50 / 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
1
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$125K
Avg loan size
$125K
Participating lenders
1
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 50/100 rating
Risk Score Breakdown
- 01MEDExtremely limited unit count (only 2 franchises) indicates unproven scalability and system maturity
- 02MEDNo disclosed unit growth history or expansion trajectory despite 10-year franchise model
- 03MINORHigh financial performance claims ($507k avg revenue, $204k avg net income) based on only 2 units — statistically unreliable and potential cherry-picking
- 04MINORRoyalty structure escalates to $3,000/month minimum by year 3, creating fixed-cost burden regardless of sales performance
- 05MINORFranchise fee of $45,000 represents 8.9% of average net income — aggressive cost recovery for unproven system
- 06MINORNo Item 19 Financial Performance Representations provided — claims cannot be independently verified
- 07MEDUnknown/undisclosed growth indicates either brand is stagnant or new to franchising
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.