B62/100FDD 2025
Cleavers Philadelphia — 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
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
No
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Pennsylvania
State whose law governs disputes — relevant if you're not based there
What drove the 62/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status indicates franchisor financial distress or viability uncertainty
- 02MINOROnly 1 unit operating makes system validation impossible; no comparable performance data or franchisee network
- 03MEDNet Income not disclosed prevents ROI calculation; with $427K–$769K investment and 5% royalties, profitability timeline is unclear
- 04MINORAverage Revenue of $4.8M appears inflated or unverified (likely franchisor data, not franchisee average); single unit cannot substantiate this claim
- 05MINORFranchise Fee ($40K) is reasonable, but total investment range suggests high overhead with unproven unit economics
- 06MINOR10-year term locks franchisee into relationship with a franchisor showing financial instability signals
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.