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D75/100FDD 2025

BluTaco — Litigation & Risk

Food & Beverage - Full 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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
Delaware
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01MINORSystem declining 15.2% YoY (29 units) — suggests franchisee dissatisfaction or market failure
  2. 02HIGHGoing Concern status = franchise company has material doubt about survival
  3. 03MINORZero royalties + $0 franchise fee = franchisor has minimal recurring revenue and weak incentive to support franchisees
  4. 04MINORNo average revenue or net income disclosure — inability or unwillingness to provide Item 19 indicates poor unit economics
  5. 05MINORWide investment range ($9K–$632K) suggests inconsistent execution or undefined business model
  6. 06MINORUnknown term length — lack of transparency on commitment period is unusual and risky

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.