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B65/100FDD 2025

Bobapop Tea Bar — Litigation & Risk

Food & Beverage - Coffee & Tea · 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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 financial disclosure (avg revenue and net income not disclosed) — impossible to assess ROI or payback period
  2. 02MINORExtremely small franchise system (only 6 units) with unproven scalability and minimal peer network for support
  3. 03MINORVery high investment range ($185.5K–$425.5K) relative to system size creates liquidity risk if franchise underperforms
  4. 04MINORDual royalty structure (2.5%–4%) with non-traditional units undefined — potential for hidden costs or margin compression
  5. 05MINOR5-year term is shorter than industry standard (typically 10 years), suggesting higher renewal uncertainty
  6. 06MINOR25% YoY growth on 6-unit base is only ~1.5 net new units — growth rate may not be sustainable or statistically significant

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.