B59/100FDD 2024
Veronica's Insurance — Litigation & Risk
Business Services - Tax & Financial · 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
59 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MEDNo average revenue or net income disclosed (Item 19) — impossible to assess ROI on $129k-$189k investment
- 02MINORExtremely high royalty on renewal business (30%) creates ongoing margin pressure and incentivizes churn
- 03MEDOnly 45 units systemwide with unknown growth trajectory — suggests limited scale and market validation
- 04HIGHGoing Concern status is FALSE — unclear if this means franchisor has liquidity/viability concerns
- 05MINOR5-year term is relatively short; unclear renewal terms and post-expiration non-compete enforceability
- 06MINORSignificant spread between new business (15%) and renewal (30%) royalties creates accounting complexity and potential disputes
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.