B59/100FDD 2025
Black Rifle Coffee Company — Litigation & Risk
Food & Beverage - Coffee & Tea · FDD Items 3, 4 & 5
Moderate — Review
4 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
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
2
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.3M
Avg loan size
$649K
Participating lenders
2
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
Utah
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MINORNo average unit volume (Item 19) disclosure prevents ROI validation against $1.6M-$3.3M investment
- 02HIGHMultiple active litigation cases including royalty disputes with Strategy and Execution, Inc. suggest operational/payment conflicts
- 03MINORSlow unit growth (11.1% YoY on 37 units = ~4 net new franchises annually) indicates market saturation or franchisee struggles
- 04MINORHigh initial investment ($1.6M-$3.3M) with 6% royalty creates aggressive break-even threshold requiring $27K-$55K monthly revenue
- 05HIGHLitigation involving warrant agreements and Tang Capital Partners suggests corporate governance instability and potential founder/investor conflicts
- 06HIGHGoing Concern designation is FALSE, but absence of financial transparency (no revenue/income disclosure) creates blind spot for profitability assessment
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.