D73/100FDD 2022
Village East Gifted — Litigation & Risk
Education - Children's Programs · 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
73 / 100
FranchiseVerdict composite
Rating
CAUTION
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
New York
State whose law governs disputes — relevant if you're not based there
What drove the 73/100 rating
Risk Score Breakdown
- 01MINOROnly 2 existing units creates severe lack of validation data and suggests minimal market traction despite franchise availability
- 02MINOR8.5% royalty on average revenue of $115,731 yields only ~$9,837 annual royalties per unit, indicating royalty structure may not support franchisor sustainability
- 03MINOR21.2% net profit margin ($24,584 on $115,731) is healthy but average revenue is modest; narrow operating margin leaves little buffer for underperforming locations
- 04MINORUnknown growth trajectory with only 2 units prevents assessment of system expansion health or franchisee success rate
- 05MINORWide investment range ($33,459–$168,436) suggests highly variable startup costs; unclear what drives 5x difference between low and high end
- 06MEDNo Item 19 financial performance data disclosed; cannot validate whether the $115,731 average and $24,584 net income are realistic for new franchisees
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.