Cookie Cutters: Litigation & Risk
Personal Care & Beauty · FDD Items 3, 4 & 5
Moderate: Review
1 case disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 63 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 24
- Government-backed loans issued
- Charge-off rate
- 14.3%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 3 loans
- Loans charged off or defaulted
- Total loan volume
- $3.8M
- Avg loan size
- $157K
- Participating lenders
- 10
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
- Utah
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Sugar Buns, LLC v. Chip Partners, LLC, Neal Courtney, Sean Wilson and Sarah Wilson (Utah Business and Chancery Court, filed May 2025) - franchisee of an unrelated cookie brand (Chip) alleged unauthorized financial performance representations; settled August 2025, dismissed with prejudice September 2025.
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.