FranchiseVerdict
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F79/100FDD 2023

Brooklyn Dumpling Shop — Litigation & Risk

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

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Elevated Risk

6 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
6
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
79 / 100
FranchiseVerdict composite
Rating
AVOID
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
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 79/100 rating

Risk Score Breakdown

  1. 01MINOROnly 3 operating units indicates minimal system scale and severely limits validation sample size
  2. 02MINORMultiple employment-related lawsuits (FLSA violations) suggest systemic labor compliance or wage-and-hour issues affecting franchisee operations
  3. 03HIGHTrademark infringement/unfair competition litigation involving officers/principals raises brand integrity and leadership credibility concerns
  4. 04MEDNo Item 19 (average unit volumes) disclosed — unable to assess realistic revenue potential or ROI on $373K-$722K investment
  5. 05MINORNo average net income data prevents franchisee from calculating true profitability or break-even timeline
  6. 06HIGHGoing Concern status = False suggests parent company may face financial viability questions
  7. 07MED6% royalty on undisclosed revenues creates ongoing cost burden with no baseline performance metrics
  8. 08MINORUnknown unit growth trajectory indicates stagnant or declining franchise interest despite protected territories

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.