B63/100FDD 2025
The Swing Bays — 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
63 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
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
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
Colorado
State whose law governs disputes — relevant if you're not based there
What drove the 63/100 rating
Risk Score Breakdown
- 01MINOROnly 1 franchised unit reported — extreme lack of system validation and growth trajectory data
- 02HIGHGoing Concern status is FALSE — indicates potential financial instability or uncertainty at franchisor level
- 03MINORWide investment range ($246.4K–$999K) suggests inconsistent build-out costs or undefined support model
- 04HIGHNo disclosed litigation but single-unit system limits legal history visibility and franchisee protection precedent
- 05MINORItem 19 (Financial Performance Representations) absent — cannot independently verify claimed $1.01M average revenue or $161K net income figures
- 06MINOR6% royalty on $1.01M revenue = ~$61K annual ongoing fees, compressing already-modest net margins
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.