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B55/100FDD 2025

VaVia — 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
55 / 100
FranchiseVerdict composite
Rating
MODERATE
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
8
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

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

What drove the 55/100 rating

Risk Score Breakdown

  1. 01MEDMinimal unit growth (6.7% YoY) with only 17 locations suggests limited scalability and system maturity concerns
  2. 02HIGHRecent litigation (May 2024) shows franchisor enforcing covenants aggressively; franchisee couldn't meet payment obligations indicating potential unit economics stress
  3. 03HIGHNo Item 19 financial performance representation ('Going Concern: False') — franchisor provides no average unit volume data to validate the $1.37M average revenue claim
  4. 04MINORHigh investment range ($236K-$863K) with wide variance suggests inconsistent site requirements or hidden costs
  5. 05MINORRoyalty structure creates dual burden: 8% of gross sales PLUS minimum monthly fee could be punitive in slow months
  6. 06MINORJudgment amount ($138K) represents 2.8x the franchise fee, indicating serious unit-level profitability problems for at least one franchisee

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.