FranchiseVerdict
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B63/100FDD 2026

Zagg — Litigation & Risk

Retail · FDD Items 3, 4 & 5

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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
63 / 100
FranchiseVerdict composite
Rating
MODERATE
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
1
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$150K
Avg loan size
$150K
Participating lenders
1

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

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORSystem declining: 98 units with -1.0% YoY contraction signals shrinking franchise network
  2. 02MINORNo profitability disclosure: Average net income not provided in FDD Item 19 prevents ROI validation
  3. 03MINORWeak unit economics: $29,825 average revenue is extremely low relative to $49k-$109k investment, suggesting 27-369% year-one payback or longer
  4. 04MINORHigh minimum royalties relative to revenue: $400-$800/month minimums consume 16-32% of average unit revenue before other operating costs
  5. 05MEDShort initial term: 3-year term creates uncertainty; limited time to establish customer base before renewal negotiation
  6. 06HIGHGoing concern risk: False designation suggests franchisor may have financial instability or operational constraints
  7. 07MINORMobile accessory market maturity: ZAGG operates in commoditized consumer electronics space with intense competition and price compression

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.