F80/100FDD 2026
Big Apple Bagels — Litigation & Risk
Food & Beverage - Bakery · FDD Items 3, 4 & 5
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
80 / 100
FranchiseVerdict composite
Rating
AVOID
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
83
Government-backed loans issued
Default rate
34.6%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
27 loans
Loans charged off or defaulted
Total loan volume
$11.0M
Avg loan size
$132K
Participating lenders
48
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
Illinois
State whose law governs disputes — relevant if you're not based there
What drove the 80/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-2.0% YoY) signals system contraction and potential franchisee dissatisfaction
- 02MEDNet income not disclosed in FDD Item 19 — impossible to validate profitability claims or ROI
- 03MINORNo protected territory creates direct competition risk; new units could cannibalize existing franchise revenue
- 04MINORHigh initial investment ($512.5K–$745K) with unverified return expectations and no income disclosure
- 05MINOR5% royalty on $632K average revenue = $31.6K annual payment with unknown profit margins
- 06MED48-unit system is small and vulnerable; limited economies of scale and supplier negotiating power
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.