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B66/100FDD 2025

yorCMO — Litigation & Risk

Business Services - Other · 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
66 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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
Nebraska
State whose law governs disputes — relevant if you're not based there

What drove the 66/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential financial instability or viability concerns at corporate level
  2. 02HIGHTwo litigation cases including 2021 Virginia settlement for improper franchise registration and sales practices — suggests compliance issues
  3. 03HIGHCo-Founder involved in breach of contract and fraud claims (settled 2018) — raises governance and integrity concerns
  4. 04MINORNo average revenue or net income disclosure — inability to assess franchisee profitability or realistic ROI on $13.7K-$117K investment
  5. 05MINORExtremely wide investment range ($13.7K-$117K) with no clarification on what determines tier pricing or what each tier includes
  6. 06MINORUnprotected territory with modest unit growth (16% YoY on only 30 units) — franchisees face direct competition and weak market validation
  7. 07MINORComplex royalty structure (7%/5%/50% depending on tier) with no explanation of tier conversion or what 'Lite' model means at 50% royalty

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.