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B55/100FDD 2026

Cookie Advantage — Litigation & Risk

Food & Beverage - Bakery · 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
55 / 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
6
Government-backed loans issued
Default rate
40.0%
vs <3% typical · system-wide
5-yr default rate
100.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$594K
Avg loan size
$99K
Participating lenders
3

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
Oklahoma
State whose law governs disputes — relevant if you're not based there

What drove the 55/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 5.9% YoY (24 units is very small system with negative momentum)
  2. 02MEDNet income not disclosed in FDD — cannot assess actual profitability or ROI
  3. 03MINORAverage revenue of $443k against $92.5k-$171k investment requires 5+ years to break even before accounting for royalties, rent, and labor
  4. 04MINOREscalating royalty structure ($800 minimum floor from month 13) creates cash flow pressure for underperforming locations
  5. 05MINORVery small franchise system (24 units) limits brand recognition, supply chain leverage, and support infrastructure
  6. 06MINOR5-year term is relatively short; rebuild investment required after expiration creates exit risk

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.