B63/100FDD 2025
Deli Delicious — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 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
21
Government-backed loans issued
Default rate
18.8%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$6.5M
Avg loan size
$311K
Participating lenders
9
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
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 63/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 4.5% YoY indicates system contraction and potential franchisee dissatisfaction
- 02MEDNet income not disclosed in Item 19 prevents accurate ROI assessment despite $548,705 average revenue
- 03HIGHTwo litigation cases (one settled for $60,000) suggest operational or compliance issues within the system
- 04MEDHigh investment range ($122,800–$474,350) with 6% royalty creates significant financial burden relative to undisclosed profitability
- 05HIGHGoing Concern status is False, indicating potential financial instability of franchisor
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.