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B64/100FDD 2025

Duck Donuts — Litigation & Risk

Food & Beverage - Bakery · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
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
97
Government-backed loans issued
Default rate
20.5%
vs <3% typical · system-wide
5-yr default rate
40.0%
Defaults
8 loans
Loans charged off or defaulted
Total loan volume
$38.7M
Avg loan size
$399K
Participating lenders
41

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

What drove the 64/100 rating

Risk Score Breakdown

  1. 01MINORNo net income disclosure (Item 19) prevents ROI verification on $537k average revenue
  2. 02MINORCalifornia regulatory violation in 2022 for operating without registration and deceptive advertising practices
  3. 03MINORModest unit growth of 7.5% YoY suggests slowing expansion momentum in competitive QSR market
  4. 04MEDHigh initial investment ($514k–$737k) relative to disclosed average revenue creates breakeven uncertainty
  5. 05HIGHGoing Concern status is False, indicating potential financial stability concerns at corporate level

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.