B60/100FDD 2024
Captain D's — 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
60 / 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
42
Government-backed loans issued
Default rate
18.2%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
6 loans
Loans charged off or defaulted
Total loan volume
$30.0M
Avg loan size
$714K
Participating lenders
26
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
3 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
Tennessee
State whose law governs disputes — relevant if you're not based there
What drove the 60/100 rating
Risk Score Breakdown
- 01MINORDeclining unit growth at 1.8% YoY suggests system maturation or contraction in a casual dining segment facing headwinds
- 02MINORHigh initial investment ($898K-$1.35M) coupled with modest net income ($232K avg) yields 3-4 year payback period with execution risk
- 03MINOR21.4% net margin is healthy but below QSR industry standards; vulnerable to labor/commodity inflation in seafood-heavy menu
- 04MEDNo Item 19 (financial performance representation) disclosed—cannot verify if $1.08M average revenue and $232K net income are system-wide or cherry-picked
- 05MED20-year term with 4.5% royalty locks franchisee into aging casual dining format with limited flexibility to pivot
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.