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D70/100FDD 2025

Bud’s Place — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
Nevada
State whose law governs disputes — relevant if you're not based there

What drove the 70/100 rating

Risk Score Breakdown

  1. 01MEDZero disclosed franchise units with unknown growth trajectory indicates either brand collapse, complete system rebuild, or intentional opacity
  2. 02MINORSEC settlement (2016) for audit procedure violations and Michigan regulatory consent order (2019) suggest financial reporting and compliance issues
  3. 03MEDNo Item 19 (average revenue/net income) disclosed—impossible to validate ROI on $576K–$1.2M investment or assess $2,500 weekly minimum royalty sustainability
  4. 04MINORHigh minimum royalty ($2,500/week = $130K/year) on unknown average unit volumes creates severe downside risk for franchisees
  5. 05HIGHGoing Concern flag combined with zero active units raises solvency and ongoing franchisor support concerns
  6. 06MED10-year term lock-in with protected territory but no performance benchmarks or exit clauses disclosed

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.