FranchiseVerdict
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A42/100FDD 2024

Charleys Philly Steaks — 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
42 / 100
FranchiseVerdict composite
Rating
STRONG
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
54
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$23.6M
Avg loan size
$437K
Participating lenders
30

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
Ohio
State whose law governs disputes — relevant if you're not based there

What drove the 42/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Unit Volume) disclosed — cannot verify $942k average revenue claim or actual profitability
  2. 02MINORUnprotected territory creates direct competition risk; 761 units growing 30.1% YoY may saturate markets rapidly
  3. 03MEDWide investment range ($202k–$936k) suggests inconsistent unit economics or hidden costs not disclosed upfront
  4. 04MEDNet income not disclosed — royalty floor of $300/mo ($3,600/yr) on $942k revenue is only 0.38%, masking true take-home profit
  5. 05MINORRapid unit growth (30.1% YoY) without protected territory indicates aggressive expansion that may cannibalize existing franchisees' sales

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.