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D72/100FDD 2025

BeaverTails — Litigation & Risk

Food & Beverage - Quick 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
72 / 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
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1.5 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
Minnesota
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINOROnly 2 existing units — critically small system with no demonstrated scalability or proven model
  2. 02MINORNo average revenue or net income disclosure — inability to assess unit economics or ROI potential
  3. 03MINORWide investment range ($165K–$1.15M) suggests inconsistent unit costs and lack of standardization
  4. 04MINOR0% royalty model dependent on product rebates/markups — franchisor incentives misaligned with franchisee profitability
  5. 05MINORNo growth trajectory provided — 2 units may be stagnant or recently launched with unproven demand
  6. 06MED5-year term is shorter than industry standard — higher renewal risk and limited payback window
  7. 07HIGHGoing concern status indicates potential financial instability at franchisor level

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.