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A46/100FDD 2025

Cinnaholic — Litigation & Risk

Food & Beverage - Bakery · FDD Items 3, 4 & 5

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Moderate — Review

5 cases disclosed in FDD Items 3 and 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)
—
Franchisor or officer bankruptcy
Overall risk score
46 / 100
FranchiseVerdict composite
Rating
STRONG
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
53
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$14.0M
Avg loan size
$264K
Participating lenders
25

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
1 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
Georgia
State whose law governs disputes — relevant if you're not based there

What drove the 46/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — franchisor may have material financial/operational uncertainty
  2. 02MINORStagnant unit growth at 2.5% YoY with only 83 units indicates struggling system expansion
  3. 03HIGHActive franchisor-initiated litigation against POS vendor and franchisee suggests operational/contractual conflicts
  4. 04MINORNo Item 19 (Average Net Income) disclosure limits ability to validate $241k-$526k investment ROI
  5. 05HIGHPrior CEO litigation involving bankruptcy trustee raises governance and fiduciary credibility concerns
  6. 06MINORHigh franchise fee ($40k) relative to thin average revenue ($313.5k) creates margin pressure

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.