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A51/100FDD 2024
CrunCheese Korean Hot Dog — Litigation & Risk
Food & Beverage - Quick Service · 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
51 / 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
Nevada
State whose law governs disputes — relevant if you're not based there
What drove the 51/100 rating
Risk Score Breakdown
- 01MINORNo financial performance disclosure (Item 19) — cannot validate the $190K-$652K investment ROI claims
- 02MINORExplosive 300% YoY unit growth with only 16 units suggests either rapid unsustainable expansion or inflated growth metrics from very small baseline
- 03HIGHGoing Concern = False indicates potential franchisor financial instability or operational uncertainty
- 04MINORUnprotected territory creates direct competition risk — franchisees could cannibalize each other's sales in same market
- 05MINORWide investment range ($462,450 spread) without corresponding revenue/profit disclosure raises transparency concerns
- 06MEDEarly-stage brand maturity — 16 units is extremely small system with limited operational track record to validate model
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.