A47/100FDD 2025
Cleanest Restaurant Group — 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
47 / 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
7
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.0M
Avg loan size
$147K
Participating lenders
4
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
New York
State whose law governs disputes — relevant if you're not based there
What drove the 47/100 rating
Risk Score Breakdown
- 01MINORExtreme unit growth of 150% YoY suggests either aggressive expansion or significant turnover; sustainability unclear with only 11 total units
- 02MINORMassive net income-to-revenue ratio (366% or $705,930 net on $192,579 revenue) is mathematically implausible and suggests data error, accounting manipulation, or outlier franchisee performance
- 03MINORHigh initial investment ($102,686-$144,174) combined with 8% royalty requires $192,579+ annual revenue just to break even within 1-2 years, leaving minimal margin for error
- 04HIGHNo disclosed litigation history in a restaurant group is unusual; may indicate under-reporting or new franchise system with insufficient operating history
- 05MINOROnly 11 units is extremely small; insufficient data to validate unit economics or franchise model viability across different markets
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.