A48/100FDD 2025
Cookie Plug — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
48 / 100
FranchiseVerdict composite
Rating
STRONG
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
22
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
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
Indiana
State whose law governs disputes — relevant if you're not based there
What drove the 48/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — indicates potential financial instability or undisclosed operational issues at corporate level
- 02HIGHTwo active litigation cases involving franchise law violations and corporate ownership disputes create legal uncertainty and reputational risk
- 03MEDHigh initial investment ($174K–$568K) paired with 7% royalty rate leaves limited margin for error; average net income of $108K yields only 35.6% net margin before accounting for rent, labor, and other overhead
- 04MINORRapid unit growth (55.6% YoY) on small base (31 units) suggests early-stage franchise with unproven unit economics and retention; high growth can mask underlying franchise satisfaction issues
- 05HIGHLitigation involving David Denker and alleged Michigan Franchise Investment Law violations suggest potential corporate compliance gaps that could expose franchisees to legal liability
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.