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B61/100FDD 2025

Chuck’s Hot Chicken — 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
61 / 100
FranchiseVerdict composite
Rating
MODERATE
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
Missouri
State whose law governs disputes — relevant if you're not based there

What drove the 61/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is False — indicates potential financial instability at franchisor level despite revenue claims
  2. 02MEDNo disclosed net income data — inability to verify actual profitability; average revenue of $1.1M may not translate to franchisee-level returns after 5.5% royalty + operating costs
  3. 03HIGHActive litigation in 2023 (breach of contract settlement) — suggests franchisor-franchisee relationship tensions and enforcement willingness
  4. 04MINOROnly 6 units with 150% YoY growth — extremely small system size creates concentration risk and limits operational data reliability
  5. 05MEDHigh investment range ($499K-$817K) paired with undisclosed profitability — ROI timeline and payback period cannot be validated
  6. 06MED5-year term with no renewal information disclosed — short initial commitment increases risk if franchisor encounters financial distress

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.