FranchiseVerdict
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B65/100FDD 2025

DOS COYOTES border café — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

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

What drove the 65/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — franchisor's financial viability is questionable despite Item 19 revenue claims
  2. 02MINORRecent $675,000 wage & hour class action settlement (2024) suggests systemic labor compliance issues that may plague franchisees
  3. 03MINOROnly 11 units with unknown growth trajectory — extremely small system with no visibility into expansion or retention
  4. 04HIGHHigh litigation history (2 disclosed actions including developer breach of contract) indicates franchisor-franchisee relationship problems
  5. 05MINORNet income of only $172,534 on $2.3M revenue (7.4% margin) is thin; royalty creep (2-5%) and $40k fee pressure margins further
  6. 06MEDNo Item 19 financial performance representation disclosed — cannot validate franchisor's average unit economics claims

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.