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A53/100FDD 2025
Café Mexicali — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
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
53 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID
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
Colorado
State whose law governs disputes — relevant if you're not based there
What drove the 53/100 rating
Risk Score Breakdown
- 01MINOROnly 5 units in system with unknown growth trajectory suggests minimal scale and potentially stagnant expansion
- 02MINORRoyalty structure doubles from 3% to 6% in week 21, creating significant cost increase that could compress margins substantially
- 03MINORLarge investment range ($558K-$1.24M) with only 5 units makes performance benchmarking difficult and suggests inconsistent unit economics
- 04HIGHNo disclosed litigation is positive, but extremely small unit count limits meaningful litigation history
- 05MINORAverage net income of $466K on $2.36M revenue (19.7% net margin) is solid but unclear if this reflects mature units, new units, or company-operated locations
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.