FranchiseVerdict
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A42/100FDD 2025

Biggby Coffee — Litigation & Risk

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

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
42 / 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
244
Government-backed loans issued
Default rate
2.9%
vs <3% typical · system-wide
5-yr default rate
4.5%
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$66.4M
Avg loan size
$272K
Participating lenders
60

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

What drove the 42/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern issue flagged — indicates potential financial distress at corporate level despite positive unit growth
  2. 02MINORUnprotected territory creates direct competition risk; 420 units in system means potential market saturation without exclusivity
  3. 03HIGHLitigation case shows franchisor aggressively enforced termination but franchisee bankruptcy suggests inadequate unit profitability to cover legal costs and damages
  4. 04MEDNet income of $91,984 on $720,465 revenue (12.8% margin) is thin; 6% royalty plus operating costs leave limited cushion for unforeseen expenses
  5. 05MINORNo Item 19 financial performance representation limits transparency; average figures may mask poor performer data and survivor bias

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.