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A32/100FDD 2026

Transworld Business Advisors — Litigation & Risk

Real Estate · FDD Items 3, 4 & 5

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Moderate — Review

4 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
32 / 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
17
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.6M
Avg loan size
$210K
Participating lenders
13

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
3 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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 32/100 rating

Risk Score Breakdown

  1. 01HIGHLitigation history involving affiliate brands (Signarama, Great Greek, Graze Craze) regarding franchise sales practices and financial misrepresentation raises questions about corporate governance and disclosure accuracy
  2. 02MINORMinimal system growth (2.6% YoY) with 467 units suggests stagnation or contraction, inconsistent with a mature 35-year franchise term
  3. 03MEDNet income not disclosed in FDD Item 19, making it impossible to verify profitability claims or validate the $114K-$143K investment ROI
  4. 04MINORRoyalty structure creates misalignment: $500-$1,000 monthly minimums mean franchisees pay $6K-$12K annually even at zero revenue, creating cash flow risk
  5. 05MINORAverage revenue of $751K falls directly at the royalty tier threshold (10% up to $750K vs. 9% above), suggesting potential manipulation or clustering of reported figures
  6. 06MINOR35-year term with $69,500 upfront franchise fee is exceptionally long and expensive for a business advisory service with opaque profitability

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.