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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
59 / 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
9
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
$12.9M
Avg loan size
$1.4M
Participating lenders
4
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
Utah
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MINORExtreme unit growth (2100% YoY) suggests either unreliable historical data or unsustainable expansion that may indicate quality control and support issues
- 02MINORNet income of $22.93 is extraordinarily low relative to $1.1M average revenue (2.08% net margin) — raises serious questions about unit economics and profitability claims
- 03MEDNo Item 19 (Financial Performance Representation) disclosed despite aggressive franchisee recruitment, making revenue/profit claims unverifiable
- 04HIGHGoing Concern flag is FALSE but unusually emphasized — suggests franchisor may have had going concern issues that are now resolved but warrant investigation
- 05MINORHigh royalty rate (7%) combined with minimal net margins creates cash flow risk for franchisees, especially early in operation
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.