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A30/100FDD 2026

Arby’s — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

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Elevated Risk

8 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
30 / 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
261
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

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

What drove the 30/100 rating

Risk Score Breakdown

  1. 01MINORSlow unit growth of only 2.5% YoY suggests market saturation or franchisee underperformance in mature system
  2. 02MINORMultiple class action lawsuits regarding product misrepresentation (meat quantity/wagyu content) and data security breaches damage brand reputation and consumer trust
  3. 03MEDNo disclosed average net income despite $1.27M average revenue creates opacity around actual franchisee profitability and ROI
  4. 04MEDHigh royalty rates (4-6.2%) combined with undisclosed net margins make it difficult to validate ROI on $651k-$2.45M investment
  5. 05HIGHNo-poaching litigation and multi-state settlements indicate hostile franchisor-franchisee relations and potential labor recruitment restrictions
  6. 06MINORWide investment range ($1.8M spread) suggests highly variable unit economics depending on location/format, increasing execution risk

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.