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A54/100FDD 2026

Barberitos — Litigation & Risk

Other · 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
54 / 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
5
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
$1.6M
Avg loan size
$317K
Participating lenders
4

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

Contract Risk Indicators

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

What drove the 54/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 (Net Income) disclosure – cannot validate profitability claims against $505.5K-$720K investment
  2. 02MINORStagnant unit growth (2.4% YoY) with only 43 locations suggests market saturation or franchisee struggles
  3. 03MEDHigh initial investment ($505.5K-$720K) relative to disclosed average revenue ($1.14M) creates thin margin for error
  4. 04HIGHNo going concern statement despite small system size – suggests potential financial instability
  5. 05MINORRoyalty structure (6% of Net Sales) on average $1.14M revenue extracts ~$68.4K annually plus ongoing operational costs

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.