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D75/100FDD 2025

CaliFries — Litigation & Risk

Food & Beverage - Juice & Smoothies · FDD Items 3, 4 & 5

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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
75 / 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
No
Franchisor can match any purchase offer when you try to sell
Governing law
California
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01MINORZero operating units despite established franchise model—suggests system collapse, failed rollout, or severely understated opportunity
  2. 02MEDNo average revenue or net income disclosed (missing Item 19)—impossible to validate ROI on $156K–$251K investment
  3. 03HIGHGoing concern status is FALSE—indicates material doubt about franchisor's financial viability or ability to support franchisees
  4. 04MINORUnprotected territory with only 3-year term—high cannibalization risk and vulnerability to franchisor opening competing units
  5. 05MINORLow $600/month royalty relative to $38K franchise fee suggests unsustainable unit economics or franchisor cash flow crisis
  6. 06MINORUnknown growth trajectory with zero franchises operating—no proof of concept, replicable model, or franchisee success

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.