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B65/100FDD 2025

Crab N Spice — 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
65 / 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
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.7M
Avg loan size
$291K
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
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 financial disclosure (average revenue and net income not provided) — impossible to validate ROI claims or profitability benchmarks
  2. 02HIGHGoing Concern status is False, indicating potential financial instability or structural uncertainty within the franchisor
  3. 03MINORExtremely wide investment range ($396K–$892K, 125% spread) suggests inconsistent build-out costs, poor cost controls, or variable location requirements
  4. 04MINOROnly 9 total units with 75% YoY growth is modest absolute scale; high growth rate may indicate instability rather than traction in early/fragile stage
  5. 05MED6% royalty on undisclosed sales makes it difficult to model break-even; true ROI cannot be calculated without Item 19
  6. 06HIGHNo litigation disclosed is neutral, but absence of financial data prevents assessment of franchisor viability

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.