D76/100FDD 2023
Chuck Lager Restaurant — 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
76 / 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
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
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 76/100 rating
Risk Score Breakdown
- 01MINOROnly 4 units system-wide indicates minimal scale, network support, and supply chain leverage
- 02MINORNo Item 19 (Average Unit Volume) disclosure prevents ROI validation and profitability assessment
- 03HIGHGoing Concern status = FALSE suggests franchisor financial instability or operational distress
- 04MINORWide investment range ($1.05M–$3.95M) lacks transparency on what drives 276% cost variance
- 05MEDNo disclosed average net income makes it impossible to calculate payback period or break-even timeline
- 06MINORMicro-franchise system (4 units) creates high risk of system collapse if even one unit fails
- 07MEDUnknown unit growth trajectory signals either stagnation or undisclosed closures
- 08MINOR15-year term locks franchisee into relationship with unstable franchisor for extended period
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.