FranchiseVerdict
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A46/100FDD 2025

We Rock The Spectrum Kid’s Gym — Litigation & Risk

Health & Fitness · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
46 / 100
FranchiseVerdict composite
Rating
STRONG
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
112
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
Not required
You retain the right to sue in court
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 46/100 rating

Risk Score Breakdown

  1. 01MINORNo average revenue or net income disclosure (Item 19) prevents realistic ROI assessment and is a major transparency gap
  2. 02HIGHTwo litigation matters within 6 years (2017 breach of contract + 2018 asset purchase dispute with prevailing party judgment against franchisor) suggest operational/legal compliance issues
  3. 03MEDHigh initial investment ($162,900–$337,291) combined with undisclosed profitability creates significant risk without performance benchmarks
  4. 04MINORSpecialized niche market (autism/special needs) limits customer base scalability and creates demographic dependency
  5. 05MED5% royalty on undisclosed gross revenue model prevents transparency on actual franchisee net margins

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.