B62/100FDD 2024
Cannoli Kitchen Pizza — Litigation & Risk
Food & Beverage - Quick Service · FDD Items 3, 4 & 5
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
62 / 100
FranchiseVerdict composite
Rating
MODERATE
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
169
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
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
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 62/100 rating
Risk Score Breakdown
- 01MINOROnly 6 units system-wide with unknown/stagnant growth trajectory indicates minimal brand scale and market validation
- 02HIGHGoing Concern = False signals serious franchisor financial distress or viability questions
- 03HIGHSignificant litigation history across affiliated brands (Signarama, Great Greek, Graze Craze) involving FTC injunctions, unregistered sales, and fee collection violations suggests systemic compliance and management issues
- 04MINORNo protected territory despite high initial investment ($402k-$536k) creates direct competition risk from other franchisees
- 05MINOR6% royalty on $1.33M average revenue ($80k annual) combined with unproven unit economics across tiny system raises sustainability concerns
- 06MINOR35-year term is unusually long for food franchise with only 6 units and no growth evidence
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.