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B59/100FDD 2025

East of Chicago Pizza — Litigation & Risk

Food & Beverage - Pizza · 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
59 / 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
58
Government-backed loans issued
Default rate
18.9%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
10 loans
Loans charged off or defaulted
Total loan volume
$7.5M
Avg loan size
$129K
Participating lenders
17

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

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MINORMinimal system growth (1.6% YoY) with only 66 units suggests market saturation or brand weakness
  2. 02MINORNo Item 19 (average net income) disclosure limits ability to assess true profitability despite $674K avg revenue
  3. 03HIGHRecent litigation (2022-2023) involving former franchisee operating competitive business raises IP protection and enforcement concerns
  4. 04MINORWide investment range ($217.5K–$701.2K) suggests inconsistent buildout costs or undefined support structure
  5. 05MINOR5% royalty on adjusted gross revenues creates ambiguity about what deductions are permitted before royalty calculation

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.