Moderate — Review
5 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 66/100 rating
Risk Score Breakdown
- 01HIGHGoing concern status is FALSE — indicates potential financial instability or insolvency risk at corporate level
- 02HIGH4 state regulatory orders (MD, RI, VA, WA) for franchise registration/disclosure violations suggest systemic compliance failures and potential fraud risk
- 03MEDNo average revenue or net income disclosed (missing Item 19) — prevents ROI validation and suggests corporate may be hiding poor unit economics
- 04MINORWide investment range ($18K–$227K) without clear breakdown indicates lack of transparency on what franchisees actually receive
- 05MINORNo territory protection — franchisees face direct competition from other ACE SUSHI units and cannot defend market share
- 06MINORRoyalty structure tied to 'chef or invoice price' is vague and creates ambiguity on actual payment obligations
- 07HIGH1 franchise closure with small claims litigation suggests unit failure and potential payment disputes with franchisor
- 08MINOR20.6% YoY growth masks potential unit churn — growth rate is superficial without retention/closure data
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.