B59/100FDD 2025
Water Wings Swim School — Litigation & Risk
Education - Tutoring & Test Prep · FDD Items 3, 4 & 5
Moderate — Review
4 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
4
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — suggests potential financial instability at corporate level despite healthy unit economics
- 02HIGHLitigation across parent company's entire portfolio (5+ brands) indicates systemic compliance/governance issues, not isolated incidents
- 03MINOROnly 12 units with unknown growth trajectory — insufficient scale and opacity on system expansion or contraction
- 04MINORHigh initial investment ($994K-$1.4M) paired with aggressive royalty structure (6% or $2,500 minimum) creates cash flow pressure for underperforming locations
- 05MINORFranchise fee ($50K) low relative to investment size suggests thin franchisor margins and potential under-capitalization of support infrastructure
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.