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
44 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID
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
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 44/100 rating
Risk Score Breakdown
- 01MINORExtreme unit growth of 550% YoY suggests either aggressive recent acquisition/rebranding or unsustainable expansion that may indicate instability
- 02MINORPending arbitration from MMS Group regarding breach of contract and non-renewal creates precedent risk for franchisee renewal negotiations
- 03MINORFTC settlement regarding reciprocal purchase agreements signals regulatory scrutiny of franchisor's business practices and potential conflicts of interest
- 04MINORNet income of $153,070 against $483,900-$984,900 investment yields only 15-32% annual return, below typical franchise benchmarks, with high royalty drag at 5%
- 05MINORNo Item 19 financial performance representations limits ability to validate claimed average revenue figures independently
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.