B62/100FDD 2024
Clean Eatz — 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
62 / 100
FranchiseVerdict composite
Rating
MODERATE
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
69
Government-backed loans issued
Default rate
23.1%
vs <3% typical · system-wide
5-yr default rate
28.6%
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$28.4M
Avg loan size
$412K
Participating lenders
33
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
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 62/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Financial Performance Representations) disclosed — cannot independently verify $1.09M average revenue claim
- 02MINORModest unit growth of 12.8% YoY suggests market saturation or slower-than-expected expansion momentum
- 03MINORHigh investment range ($353K–$798K) with 6% royalty creates breakeven pressure on units generating below $1.09M
- 04MEDNet income margin of ~14% ($153K on $1.09M) leaves limited cushion for underperforming locations or economic downturns
- 05HIGHGoing concern status is 'False' (not explicitly stated as a going concern issue), but lack of transparency on franchisor financial health is concerning
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.