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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
62 / 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
17
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$8.3M
Avg loan size
$490K
Participating lenders
8
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
New York
State whose law governs disputes — relevant if you're not based there
What drove the 62/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 26% YoY (39 units remaining) — indicates severe system contraction and deteriorating franchisee performance
- 02MINORNo average revenue or net income disclosure (Item 19) — cannot validate investment ROI or profitability claims
- 03HIGHMultiple litigation events (2014 consent order, 2016 breach of contract lawsuit settled 2022) — pattern of regulatory and franchisee disputes
- 04MINORUnprotected territory — franchisees face direct competition from other 1-800-Flowers franchisees and corporate locations
- 05MINORHigh investment range ($258.5K–$932.5K) paired with declining unit base — suggests poor unit economics and franchisee attrition
- 06HIGHNo going concern qualification disclosed but severe contraction suggests underlying business model stress
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.