Is there any mention of pending bankruptcy litigation involving Counselor Realty in Item 4?

According to the 2025 FDD, Item 4, titled 'Bankruptcy,' addresses whether Counselor Realty, or any individuals previously identified in Items 1 or 2 of the Franchise Disclosure Document, have been involved as a debtor in bankruptcy proceedings. Item 4 explicitly states that neither Counselor Realty nor any related parties have been involved in any such bankruptcy proceedings that require disclosure under U.S. Bankruptcy Code. This statement assures potential franchisees that the company has not faced bankruptcy issues, which could otherwise indicate financial instability and pose a risk to their investment.

The absence of any bankruptcy-related disclosures in Item 4 suggests that Counselor Realty maintains a stable financial history, at least concerning bankruptcy filings. This information is crucial for prospective franchisees as it provides a level of confidence in the franchisor's ability to support the franchise system and uphold its obligations. However, it is important to note that this disclosure only covers bankruptcy proceedings and does not provide a complete picture of the company's financial health.

While the FDD states that Counselor Realty has not been involved in bankruptcy proceedings, it is essential for potential franchisees to conduct their own due diligence. This includes reviewing the company's financial statements (Item 21) and seeking advice from financial and legal professionals. Additionally, prospective franchisees may want to inquire about any other pending litigation or financial challenges that could impact the franchise system's stability and future performance.