D70/100FDD 2025
Coffee and Water Lab — Litigation & Risk
Food & Beverage - Coffee & Tea · 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
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
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
Wyoming
State whose law governs disputes — relevant if you're not based there
What drove the 70/100 rating
Risk Score Breakdown
- 01MINOROnly 1 unit in system with unknown growth trajectory indicates nascent/stalled expansion
- 02HIGHGoing Concern status is FALSE — suggests financial instability or uncertainty about franchisor viability
- 03MEDNet Income not disclosed — unable to validate profitability claims or ROI on $441k-$838k investment
- 04MINORMassive investment range ($397k spread) indicates unclear unit economics or inconsistent cost structure
- 05MINORSingle unit makes validation impossible — no comparable franchisee performance data
- 06MINOR4% royalty is low but irrelevant if franchisor cannot support franchise system growth
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.