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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
72 / 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
2
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
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
3 yrs
Post-termination restriction on similar businesses
Franchisor can compete
No
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01HIGHBoard member David Lopez has documented litigation history involving franchise misrepresentation, revenue forecast fraud, and use of unregistered brokers at prior company—raises governance and integrity concerns
- 02MEDNo average revenue or net income disclosed (Item 19 missing)—impossible to validate ROI claims or assess actual unit profitability
- 03MEDOnly 10 franchised units with unknown growth trajectory—suggests minimal scale, limited support infrastructure, and potential system contraction
- 04MINORHigh initial investment ($1.1M-$1.7M) combined with 8% royalty creates significant cash flow burden with no performance benchmarks to justify costs
- 05HIGHGoing Concern status is false but coupled with small unit count and non-disclosure raises questions about financial stability and franchisor sustainability
- 06MEDNo disclosed average unit volumes means franchisees cannot calculate break-even or assess realistic payback periods
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.