FranchiseVerdict
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B55/100FDD 2026

Cap't Loui — Litigation & Risk

Food & Beverage - Full Service · 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
55 / 100
FranchiseVerdict composite
Rating
MODERATE
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
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 55/100 rating

Risk Score Breakdown

  1. 01HIGHNo disclosed going concern status despite $197K avg net income on $2.05M revenue (9.6% net margin is thin)
  2. 02MINORUnprotected territory creates direct competition risk and customer cannibalization between franchisees
  3. 03MINOR23.5% YoY growth masks potential unit churn — need breakdown of openings vs. closures to validate sustainability
  4. 04MINOR4.5% royalty + operating costs could compress margins; unclear if $197K net includes all fees and debt service
  5. 05MINORInvestment range spans 292% variance ($463K-$1.8M) indicating inconsistent startup costs or hidden variables
  6. 06MINORNo Item 19 financial performance representations limits ability to validate claims

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.