FranchiseVerdict
16 Handles logo
A44/100FDD 2026

16 Handles — Litigation & Risk

Food & Beverage - Ice Cream & Desserts · FDD Items 3, 4 & 5

Back to overview

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
44 / 100
FranchiseVerdict composite
Rating
STRONG
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
13
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
$6.2M
Avg loan size
$474K
Participating lenders
9

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
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
Delaware
State whose law governs disputes — relevant if you're not based there

What drove the 44/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Unit Volume) disclosed despite $804,648 average revenue claim — unable to verify profitability or validate earnings claims
  2. 02MEDSlow unit growth of 6.9% YoY with only 31 total units suggests limited brand momentum and potential market saturation concerns
  3. 03MEDHigh investment range ($249,500–$656,500) combined with undisclosed net income creates uncertainty about ROI timeline and break-even point
  4. 04MINORBroad territory protection language without specifics (radius, population density) may create disputes or inadequate market exclusivity
  5. 05MINOR6% royalty on gross sales (not net) means franchisees pay royalties even in loss-making months, increasing financial pressure

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.