F79/100FDD 2023
Cho Dang — 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
79 / 100
FranchiseVerdict composite
Rating
AVOID
STRONG / MODERATE / CAUTION / AVOID
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 79/100 rating
Risk Score Breakdown
- 01MINOROnly 3 units in system with unknown growth trajectory suggests minimal scale and high failure risk
- 02HIGHGoing Concern status = FALSE indicates potential financial instability or viability questions at corporate level
- 03MINORNo Item 19 (average revenue/income disclosure) provided — impossible to validate ROI on $363.5K–$610K investment
- 04MINORHigh initial investment ($363.5K–$610K) combined with only 4% royalty creates pressure on franchisee profitability
- 05MINORFranchise fee ($90K) is substantial relative to only 3 existing units, suggesting reliance on new franchisee fees for corporate revenue
- 06MED5-year term is shorter than industry standard (10 years), creating renewal uncertainty and limited payback runway
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.