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D75/100FDD 2025

Baba Saj — 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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
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
Illinois
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01MINOROnly 2 units in system with unknown growth trajectory suggests nascent or stalled expansion
  2. 02MINORNo Item 19 (average revenue/net income) disclosure prevents ROI validation and raises transparency concerns
  3. 03HIGHGoing concern status = False indicates potential financial instability at franchisor level
  4. 04MINORHigh initial investment ($351.5K-$555.5K) relative to system size creates liquidity risk if franchise fails
  5. 05MEDExtremely limited franchisee reference pool (only 2 units) makes due diligence validation nearly impossible
  6. 06MINOR5% royalty on gross revenue (not net) means fees paid even during unprofitable periods

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.