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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
42 / 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
147
Government-backed loans issued
Default rate
4.1%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
4 loans
Loans charged off or defaulted
Total loan volume
$31.9M
Avg loan size
$217K
Participating lenders
67
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
Indiana
State whose law governs disputes — relevant if you're not based there
What drove the 42/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial performance data disclosed despite 341 existing units — inability to verify claimed $858k revenue and $149k net income averages
- 02MEDStagnant unit count (341 units with 'unknown growth') suggests mature/declining system with no disclosed expansion trajectory
- 03MINOR17.5% net margin appears optimistic for retail without substantiation — actual franchisee profitability unverified
- 04MEDHigh initial investment ($226-379k) relative to disclosed net income ($149.7k avg) creates 1.5-2.5 year break-even window with operational risk
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.