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D72/100FDD 2025

BurgerFi — Litigation & Risk

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

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Moderate — Review

4 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
19
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$13.4M
Avg loan size
$704K
Participating lenders
14

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

What drove the 72/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential solvency/viability issues at corporate level
  2. 02MEDUnit count declined 15.4% YoY (82 units) — system is actively contracting, not growing
  3. 03HIGHMultiple active litigation cases including fraud allegations, criminal indictment of officers for tax fraud conspiracy, and negligent misrepresentation claims — pattern of disputes with franchisees
  4. 04MEDNet income not disclosed in FDD Item 19 — cannot validate the $1.26M average revenue translates to acceptable profitability after 5.5% royalty + CoGS
  5. 05MINORHigh investment threshold ($704K-$1.17M) paired with declining unit count creates poor risk/reward profile
  6. 06HIGHCriminal indictment against named officers (Happy Asker, Maher Bashi) for conspiracy to defraud U.S. and filing false tax returns — raises questions about corporate integrity and financial reporting accuracy
  7. 07HIGHMultiple franchisee refund disputes and fraud inducement claims suggest corporate may have misrepresented unit economics or support

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.