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D70/100FDD 2024

Champs Chicken — Litigation & Risk

Food & Beverage - Quick Service · FDD Items 3, 4 & 5

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
1
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
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
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
Delaware
State whose law governs disputes — relevant if you're not based there

What drove the 70/100 rating

Risk Score Breakdown

  1. 01MINORNegative unit growth (-3.6% YoY) indicates system contraction and potential franchisee dissatisfaction
  2. 02MEDMultiple regulatory violations across three states (Missouri, Illinois, Washington) suggesting compliance issues and operational negligence
  3. 03MINORZero franchise fee with $0–$349K investment range is unusually broad, indicating unclear or inconsistent franchise model
  4. 04MEDNo average revenue or net income disclosure (missing Item 19) prevents validation of profitability claims
  5. 05HIGHActive litigation regarding rebates suggests franchisor-franchisee financial disputes and broken promises
  6. 06MINORSuspended registration in Illinois and permit violations in Washington indicate franchisor failed basic legal obligations
  7. 07MINORDeclining unit count combined with non-disclosure makes it impossible to assess franchisee success rates

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.