A51/100FDD 2024
With A Twist — Litigation & Risk
Business Services - Staffing · 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
51 / 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
82
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
Colorado
State whose law governs disputes — relevant if you're not based there
What drove the 51/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial disclosure (average revenue and net income not disclosed) — impossible to assess ROI or profitability
- 02HIGHGoing Concern status is FALSE, indicating potential financial instability at franchisor level
- 03MEDSmall unit base (24 locations) with only 20% YoY growth suggests limited brand recognition and slower market penetration than established competitors
- 04MEDHigh royalty rate (7%) combined with undisclosed profitability means franchisees may struggle to achieve positive cash flow
- 05MINORWide investment range ($54.5K–$136K spread of 149%) indicates inconsistent unit economics or high variability in startup costs
- 06MINORFranchise fee of $29K represents 53% of the minimum investment — heavy upfront cost burden with no revenue visibility
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.