Big Frog Custom T-Shirts: Litigation & Risk
Business Services · FDD Items 3, 4 & 5
Moderate: Review
1 case disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 63 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 16
- Government-backed loans issued
- Charge-off rate
- 10.0%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 1 loans
- Loans charged off or defaulted
- Total loan volume
- $2.2M
- Avg loan size
- $139K
- Participating lenders
- 9
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
- Florida
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Adroit 365, LLC v. Big Frog Custom T-Shirts, Inc. (Circuit Court, Oakland County, MI, filed Dec 2024) - breach of contract/conversion claim over termination of a Franchise Agreement for failure to use required POS system; franchisor filed answer, affirmative defenses, and counterclaims; case in early stages, no trial date.
What drove the 63/100 verdict
Risk Score Breakdown
- 01HIGHActive litigation with franchisee (Adroit 365) involving breach of contract and conversion claims, with franchisor counterclaim for trademark infringement suggests systemic operational/relationship issues
- 02MEDNet income not disclosed in FDD Item 19 despite $513k average revenue — impossible to assess actual profitability or ROI on $164k-$323k investment
- 03MINORRoyalty structure creates cash flow pressure: $1,200/month minimum ($14,400/year) represents 2.8% of average revenue even before growth, limiting franchisee margins
- 04MINOROnly 74 units system-wide with unknown growth trajectory — insufficient scale and transparency on unit growth/attrition rates
- 05HIGHGoing Concern flag is FALSE (meaning concern exists) — franchisor financial stability questions despite modest unit base
- 06MEDHigh initial investment ($163k-$323k) combined with undisclosed profitability metrics creates unfavorable risk/reward profile
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.