FranchiseVerdict
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B65/100FDD 2023

Del's Popcorn Shop — 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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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
Illinois
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINOROnly 2 units in system with unknown growth trajectory indicates nascent/stagnant franchise model
  2. 02MEDNet income not disclosed in Item 19 prevents ROI validation against $279k-$478k investment
  3. 03HIGHGoing Concern status is FALSE — suggests financial instability or structural concerns with franchisor
  4. 04MINORMassive gap between average revenue ($606k) and investment range suggests highly variable unit economics
  5. 05MED6% royalty on undisclosed net income makes it impossible to model actual franchisee profitability

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.