A50/100FDD 2025
Angry Crab Shack — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
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
50 / 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
4
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.3M
Avg loan size
$823K
Participating lenders
2
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
1 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
Arizona
State whose law governs disputes — relevant if you're not based there
What drove the 50/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is False — indicates potential financial instability at corporate level
- 02MEDSlow unit growth of 6.2% YoY with only 23 units suggests limited system momentum and expansion challenges
- 03MINORTwo separate lawsuits (trademark infringement and franchise breach) demonstrate legal/operational friction and brand protection issues
- 04MINORHigh investment range ($411K-$1.2M) against modest average net income ($298K) yields marginal ROI and longer payback period
- 05MINOR5% royalty on $2.89M average revenue equals ~$144K annually — significant overhead that consumes 48% of average net income
- 06MINORNo Item 19 financial performance data limits ability to validate whether average figures represent typical franchisee experience or outliers
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.