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A28/100FDD 2025

Chick-fil-A — Litigation & Risk

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

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Elevated Risk

6 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
6
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
28 / 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
2
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
Total loan volume
$3.4M
Avg loan size
$1.7M
Participating lenders
2

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
Non-compete
1 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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Georgia
State whose law governs disputes — relevant if you're not based there

What drove the 28/100 rating

Risk Score Breakdown

  1. 01MINORExtremely high royalty burden: 15% base fee plus 50% of net receipts creates potential 25-35% total fee exposure on typical QSR margins (6-9% net)
  2. 02MINORNo Item 19 (Average Unit Volume) disclosure prevents validation of $9.3M average revenue claim and actual franchisee profitability
  3. 03MINOROne-year term with no territory protection creates renewal uncertainty and vulnerability to encroachment
  4. 04HIGHRecent litigation history (cybersecurity and delivery fee class actions) indicates compliance and transparency issues
  5. 05MINORModest unit growth of 5.4% YoY is below industry standards for mature QSR brands and suggests market saturation

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.