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B57/100FDD 2024

Bombshells Restaurant & Bar — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
57 / 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
361
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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

What drove the 57/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern status indicates parent company financial distress despite $4.6M avg unit revenue
  2. 02HIGHThree major litigation settlements totaling $4M+ involving shareholder derivative, securities class action, and SEC penalties suggest governance/compliance failures at corporate level
  3. 03MINOROnly 12 units with unknown growth trajectory raises questions about system viability and franchisee recruitment success
  4. 04MEDNet income not disclosed in Item 19 prevents ROI validation; with 5.5% royalty on $4.6M revenue = $253K annual fee burden
  5. 05MEDHigh investment range ($2.1M–$5.6M) combined with undisclosed profitability creates significant return uncertainty
  6. 06MINORSEC settlement regarding executive compensation and related party transactions suggests potential misuse of franchisor resources

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.