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B64/100FDD 2025

DonutNV — Litigation & Risk

Food & Beverage - Full Service · 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
64 / 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
35
Government-backed loans issued
Default rate
16.7%
vs <3% typical · system-wide
5-yr default rate
16.7%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$6.2M
Avg loan size
$177K
Participating lenders
7

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

What drove the 64/100 rating

Risk Score Breakdown

  1. 01MEDNet income not disclosed in FDD Item 19 — unable to validate profitability claims against $159,707 average revenue
  2. 02HIGHGoing concern status is FALSE — indicates franchisor financial stability uncertainty or structural issues
  3. 03MINORHigh initial investment ($184,930–$337,250) with fixed $750/month royalty regardless of sales performance creates cash flow risk
  4. 04MINORAggressive unit growth (44.9% YoY) may indicate oversaturation, unsustainable recruitment, or poor unit retention masking closures
  5. 05MINORFranchise fee ($59,500) represents 32% of minimum investment — high upfront cost relative to startup capital
  6. 06MINORProtected territory claims lack specificity — no data on territory size, population density, or exclusivity enforcement

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.