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
61 / 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
Kansas
State whose law governs disputes — relevant if you're not based there
What drove the 61/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern Warning: Franchisor has disclosed going concern issues, indicating potential financial distress or viability questions
- 02MINORNo Net Income Disclosure: Item 19 financial performance representations absent—unable to validate if $1.9M revenue translates to meaningful profit after expenses
- 03MINORAggressive Unit Growth Masking Small Base: 50% YoY growth (4 new units) on only 8 total units is volatile and statistically insignificant; high churn risk
- 04MINORMinimal Franchisee Base: Only 8 operating units provides insufficient performance data and limits support infrastructure credibility
- 05HIGHHigh Initial Investment Range: $540K-$808K entry cost requires strong confidence in franchisor stability, which going concern status undermines
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.