Moderate — Review
3 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
77 / 100
FranchiseVerdict composite
Rating
CAUTION
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
436
Government-backed loans issued
Default rate
15.0%
vs <3% typical · system-wide
5-yr default rate
20.0%
Defaults
54 loans
Loans charged off or defaulted
Total loan volume
$89.2M
Avg loan size
$204K
Participating lenders
137
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
Georgia
State whose law governs disputes — relevant if you're not based there
What drove the 77/100 rating
Risk Score Breakdown
- 01MEDSevere unit decline of 14% YoY (685 units) indicates contracting franchise system and potential market saturation or operational issues
- 02MEDNo average net income disclosed despite $538K average revenue — suggests franchisees may have thin or negative margins after ~$27K annual royalties
- 03HIGHMultiple litigation cases involving non-renewals, contractual breaches, and vendor disputes signal adversarial franchisor-franchisee relationships and legal risk exposure
- 04MINORNo protected territory means franchisees compete with other Edible Arrangements locations and risk cannibalization within same market
- 05HIGHGoing concern status is FALSE — unusual phrasing suggests potential financial instability or questionable long-term viability of parent company
- 06MINORHigh initial investment ($213.5K-$587K) combined with declining unit count creates poor risk-reward profile for new entrants
- 07MINOR5% royalty floor of $200/week ($10,400 annually) is burdensome for struggling locations in declining system
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.