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B63/100FDD 2024

Coffee News — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

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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
63 / 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
1
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
$63K
Avg loan size
$63K
Participating lenders
1

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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Maine
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 6.2% YoY (333 units) indicates system contraction and potential market saturation or franchisee dissatisfaction
  2. 02MEDNo Item 19 (average revenue/net income) disclosed — impossible to assess actual profitability or validate $11K investment ROI
  3. 03MINORHigh weekly royalty burden ($80/week = $4,160/year) against unknown revenue creates cash flow risk for marginal performers
  4. 04MED4-year term is short; limited runway to recoup $9,900 franchise fee plus $11-12K startup costs before renewal risk
  5. 05HIGHGoing Concern = False suggests franchisor may face operational/financial viability issues that could leave franchisees stranded

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.