BAbove average53/100FDD 2025
Cicis Pizza: Litigation & Risk
Full-Service Restaurants · FDD Items 3, 4 & 5
Elevated Risk
5 cases disclosed in FDD Items 3 and 4. Bankruptcy disclosed in Item 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 5
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- Disclosed
- Franchisor or officer bankruptcy
- Verdict score
- 53 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 438
- Government-backed loans issued
- Charge-off rate
- 24.1%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 97 loans
- Loans charged off or defaulted
- Total loan volume
- $131.8M
- Avg loan size
- $301K
- Participating lenders
- 85
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
- Not waived
- 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
- TX
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
GCP Cici's/Dharod consolidated family ownership dispute (currently scheduled for July 2025 trial); Sutherland/Palumbo commercial lease suit (settled Sep 2022); 2 suits by CiCi Enterprises against franchisees for outstanding payments; 1 suit against franchisee to enforce post-termination obligations
What drove the 53/100 verdict
Risk Score Breakdown
- 01MINORSystem contracted 3.8% YoY (270 units) indicating declining franchise health and potential unit closures
- 02HIGHMultiple active litigations including co-ownership disputes (Gala/Dharod), franchisee payment recovery suits (Bixby, Bankole), and post-termination enforcement actions suggesting franchisor-franchisee conflict and collection issues
- 03MINORNet income of $158,533 on $1.4M revenue (11.3% margin) is modest for pizza/buffet concept with high operational complexity and labor costs
- 04MINORWide investment range ($242K-$1M+) with unclear variables; high end represents 4x low end, suggesting inconsistent unit economics or location-dependent performance
- 05MEDNo Item 19 financial performance representations disclosed, preventing validation of stated average revenue figures or profitability benchmarks
- 06HIGHLitigation pattern reveals systemic issues: co-ownership conflicts suggest internal franchisor instability, while franchisee payment suits indicate cash flow problems across system
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.