FranchiseVerdict
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B62/100FDD 2024

Chili’s® Grill & Bar — Litigation & Risk

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

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
62 / 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
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

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

What drove the 62/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 financial performance disclosure (average revenue/net income) makes ROI projections impossible to validate
  2. 02HIGHActive class action litigation involving parent company BII over data breach affecting customer payment card information creates reputational and potential operational risk
  3. 03MEDHigh capital requirement ($1.8M–$6.5M) combined with unknown unit growth trajectory and no disclosed profitability benchmarks
  4. 04MINORUnprotected territory allows parent company or other franchisees to saturate local market and cannibalize sales
  5. 05MINOR1214 units with unknown growth pattern suggests potential system contraction; no disclosure of unit closures or sales velocity
  6. 06MED20-year term locks franchisee into long commitment during period of casual dining sector decline and competitive pressure from fast-casual alternatives

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.