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
66 / 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
Washington
State whose law governs disputes — relevant if you're not based there
What drove the 66/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count: 13 units with -7.7% YoY contraction indicates shrinking franchise system and potential franchisee struggles
- 02MINORNo financial disclosure: Average revenue and net income not provided makes ROI analysis impossible; inability to validate 25% royalty impact
- 03MINORExtremely high royalty rate: 25% of gross receipts is among the highest in franchise industry, leaving minimal margin for profitability after operating costs
- 04HIGHNo going concern status: Franchisor reported 'False' for going concern, suggesting potential financial distress or sustainability questions at corporate level
- 05MINORWide investment range: $18,400-$83,515 variance (353% spread) indicates inconsistent unit economics and unclear cost structure
- 06HIGHNo litigation disclosure but system shrinkage: Declining units without disclosed litigation may indicate undisclosed franchisee disputes or silent closures
- 07MINORShort 5-year term: Renewal risk after initial term; insufficient data to assess renewal rates or franchisee retention beyond year 5
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.