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B57/100FDD 2025

A&w — Litigation & Risk

Food & Beverage - Full Service · 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
57 / 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
21
Government-backed loans issued
Default rate
12.5%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$15.2M
Avg loan size
$725K
Participating lenders
16

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

What drove the 57/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 6.2% YoY (429 units), indicating system contraction and potential market saturation or brand weakness
  2. 02MEDNo Item 19 financial performance representations disclosed, making it impossible to verify if average revenue ($1.33M) and net income ($244K) are achievable for typical franchisees
  3. 03MINORWide investment range ($298K-$1.64M) suggests highly variable unit economics; unclear what drives 5.5x cost differential
  4. 04MEDNet income of $244K on $1.33M revenue implies 18.4% net margin, which is optimistic for QSR; sustainability unclear without disclosed expenses breakdown
  5. 05MINOR20-year term locks franchisee into aging brand during rapid industry consolidation and changing consumer preferences

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.