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F82/100FDD 2023
Cookie Co. — Litigation & Risk
Food & Beverage - Bakery · 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
82 / 100
FranchiseVerdict composite
Rating
AVOID
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
9
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
50.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$2.1M
Avg loan size
$230K
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
Utah
State whose law governs disputes — relevant if you're not based there
What drove the 82/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern Warning: Franchisor flagged as going concern indicates potential financial distress or sustainability questions at corporate level
- 02MINORStagnant Unit Count: Only 12 units with unknown growth trajectory suggests minimal system expansion and potential market saturation or performance issues
- 03MEDMissing Item 19 Financial Data: No Item 19 disclosure prevents verification of claimed $877K average revenue and $337K net income figures
- 04MINORHigh Investment-to-Net-Income Ratio: $232.5K-$552.5K investment against $337K average net income means 9-16 month payback at best, with significant downside risk
- 05MINORTiny Franchise System: 12 units is extremely small, limiting operational support infrastructure and indicating early-stage or struggling system
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.