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A36/100FDD 2022

Crumbl Cookies — Litigation & Risk

Food & Beverage - Bakery · 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
36 / 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
581
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
3 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 36/100 rating

Risk Score Breakdown

  1. 01MINORExplosive unit growth (131.2% YoY) suggests potential market saturation and cannibalization risk — unsustainable expansion pace raises sustainability concerns
  2. 02MINORZero territorial protection despite rapid multi-unit development creates direct competition between franchisees and company-owned locations
  3. 03MINORHigh initial investment ($347k-$691k) paired with 8% royalty requires $135k+ annual sales just to break even on fees, limiting margin flexibility
  4. 04MINORItem 19 Financial Performance Representations absent — unable to independently verify claimed $357k average net income across franchise system
  5. 05MINORHypergrowth trajectory (131% YoY) indicates classic bubble dynamics; historical data needed to assess whether growth is sustainable or driven by unsustainable unit expansion

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.