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D68/100FDD 2024
Craters & Freighters — Litigation & Risk
Business Services - Shipping & Postal · 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
68 / 100
FranchiseVerdict composite
Rating
CAUTION
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
8
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$4.1M
Avg loan size
$515K
Participating lenders
8
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
Colorado
State whose law governs disputes — relevant if you're not based there
What drove the 68/100 rating
Risk Score Breakdown
- 01MINORNo Item 19 financial performance disclosure (average revenue and net income not provided) prevents ROI validation
- 02MEDStagnant or unknown unit growth with only 64 locations suggests limited brand expansion and market traction
- 03MINORHigh initial investment range ($173K-$287K) combined with dual royalty structure (5% or minimum fee) creates unpredictable ongoing costs
- 04MINOR15-year term is lengthy and locks franchisee into relationship without demonstrated unit economics
- 05MEDMinimum Monthly Royalty Fee structure not disclosed—actual royalty burden unclear and potentially burdensome in slow months
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.