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F81/100FDD 2022

Tutor Doctor — Litigation & Risk

Education - Tutoring & Test Prep · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
81 / 100
FranchiseVerdict composite
Rating
AVOID
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
78
Government-backed loans issued
Default rate
35.9%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
23 loans
Loans charged off or defaulted
Total loan volume
$8.2M
Avg loan size
$105K
Participating lenders
17

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
New York
State whose law governs disputes — relevant if you're not based there

What drove the 81/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 1.6% YoY indicates system contraction and potential market saturation
  2. 02MEDNo Item 19 (average revenue/income) disclosed—inability to validate ROI claims on $94k–$220k investment
  3. 03HIGHPrior litigation involving fraud and negligent misrepresentation allegations, even if withdrawn, signals historical franchisor credibility issues
  4. 04MEDHigh franchise fee ($54,700) combined with 8% royalty creates significant breakeven burden without disclosed profitability data
  5. 05MINOR10-year term is lengthy commitment for tutoring franchise in competitive, price-sensitive education market

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.