F79/100FDD 2024
Tutoring Club — Litigation & Risk
Education - Tutoring & Test Prep · FDD Items 3, 4 & 5
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
79 / 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
11
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
100.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$1.7M
Avg loan size
$153K
Participating lenders
7
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
Nevada
State whose law governs disputes — relevant if you're not based there
What drove the 79/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial disclosure (average revenue and net income not disclosed) — impossible to validate ROI claims or profitability benchmarks
- 02HIGHGoing Concern status is FALSE, indicating potential financial instability at the franchisor level
- 03MINOR87 units with unknown growth trajectory — no visibility into system momentum or franchisee retention rates
- 04MEDHigh royalty rate (10%) combined with undisclosed margins creates uncertainty about franchisee profitability at different revenue levels
- 05MINOR5-year term is shorter than industry standard (10 years typical), suggesting higher renewal/renegotiation risk
- 06MINORInvestment range of $88,750–$162,650 is wide (~83% variance), indicating inconsistent startup costs or unclear cost structure
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.