FranchiseVerdict
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A45/100FDD 2025

Bad Ass Coffee Of Hawaii — Litigation & Risk

Food & Beverage - Coffee & Tea · FDD Items 3, 4 & 5

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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
45 / 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
10
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$6.0M
Avg loan size
$596K
Participating lenders
8

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

What drove the 45/100 rating

Risk Score Breakdown

  1. 01MEDNet income not disclosed in Item 19 — unable to verify actual profitability despite $665k average revenue
  2. 02MINORSlow unit growth of 6.7% YoY suggests market saturation or franchisee struggles in a mature 33-unit system
  3. 03HIGHTwo settled litigation cases (promissory note dispute with area developer and international license dispute) indicate operational/contractual friction
  4. 04MEDHigh initial investment ($526k–$992k) combined with undisclosed profitability creates unclear ROI timeline
  5. 05HIGHGoing concern disclosure raises questions about franchisor financial stability and long-term support

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.