FranchiseVerdict
Trustegrity logo
B63/100FDD 2023

Trustegrity — Litigation & Risk

Other · FDD Items 3, 4 & 5

Back to overview

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
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 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
Georgia
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 financial disclosure (average revenue and net income not provided) — impossible to validate ROI claims or unit economics
  2. 02HIGHGoing Concern status is FALSE — indicates franchisor may have financial instability or operational uncertainty
  3. 03MINOR12% royalty on gross profit (not gross revenue) is unusually high and creates ambiguity around what counts as deductible expenses
  4. 04MEDOnly 22 units in system with 66.7% YoY growth — still micro-franchise with limited scale, operational maturity, and support infrastructure
  5. 05MINORWide investment range ($37,525–$74,275, 98% spread) suggests inconsistent territory economics or poorly defined startup costs
  6. 06MINOR8-year term is longer than industry standard (5-6 years typical) — locks franchisee into relationship with emerging brand

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.