FranchiseVerdict
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D70/100FDD 2024

U-Swirl Frozen Yogurt — Litigation & Risk

Other · 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
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
1
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$200K
Avg loan size
$200K
Participating lenders
1

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

What drove the 70/100 rating

Risk Score Breakdown

  1. 01MEDSystem is contracting sharply: -6.6% unit decline YoY with only 57 locations remaining, indicating weak demand and franchisee struggles
  2. 02MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents accurate ROI assessment and suggests franchisor may be hiding poor unit economics
  3. 03HIGHGoing Concern status is FALSE, indicating potential financial distress at corporate level and risk of franchisor support degradation
  4. 04HIGH2018 litigation settlement ($55,000) for franchise disclosure violations and fraudulent misrepresentation shows pattern of compliance issues and broken franchisee relationships
  5. 05MINORHigh initial investment ($418.5K-$630K) combined with declining unit count creates significant downside risk if location underperforms
  6. 06MEDFrozen yogurt category has faced secular decline post-2014; mature/saturated market with limited growth prospects
  7. 07MED6% royalty on undisclosed revenue means franchisees cannot benchmark their performance against system averages

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.