D72/100FDD 2025
Doughnuttery — Litigation & Risk
Food & Beverage - Bakery · 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
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
3 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
New York
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status indicates serious financial viability issues at franchisor level
- 02MINOROnly 4 units in system suggests minimal scale, unproven model, and high failure risk
- 03MEDNet income not disclosed despite $433k average revenue — potential profitability concerns or intentional opacity
- 04MINORWide investment range ($172.9k-$450.2k) with no clear explanation of variance drivers
- 05MEDNo disclosed unit growth trajectory — stagnant 4-unit system raises sustainability questions
- 06MINOR6% royalty on gross sales (not net) means franchisees pay even during loss months
- 07MINORExtremely small franchise system limits support infrastructure and peer learning opportunities
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.