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D75/100FDD 2024

Wateria — Litigation & Risk

Retail · FDD Items 3, 4 & 5

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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
75 / 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
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$150K
Avg loan size
$150K
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
Governing law
California
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status indicates franchisor financial distress or viability questions
  2. 02MEDZero disclosed unit count with unknown growth trajectory suggests system collapse, startup phase, or data concealment
  3. 03MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and profitability assessment
  4. 04MINORTiered royalty structure on alkaline water (35% down to 25%) is extraordinarily high and may be unsustainable at lower volumes
  5. 05MINORModest initial investment ($134K-$203K) contradicts complex royalty model, suggesting potential underfunding or aggressive unit economics
  6. 06MINOR5-year term is shorter than industry standard (10 years), indicating either high franchisor confidence issues or franchisee protections concerns
  7. 07HIGHNo litigation disclosed but going concern status raises questions about hidden disputes or regulatory issues
  8. 08MINORPurified water royalty (2 cents/gallon) lacks context on volume thresholds or profitability floors

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.