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B62/100FDD 2025

EggBred — Litigation & Risk

Food & Beverage - Full Service · 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
62 / 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
5
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.8M
Avg loan size
$365K
Participating lenders
4

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

What drove the 62/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential financial distress or viability questions at corporate level
  2. 02MINOROnly 3 units system-wide with unknown growth trajectory — extremely small, unproven system with no expansion momentum
  3. 03HIGHMaterial litigation: $1.007M judgment rendered April 2024 against third-party defendants including sales broker, involving fraud and securities violations — raises questions about corporate integrity and sales practices
  4. 04MEDNet Income not disclosed — lack of transparency on actual profitability; cannot validate 5% royalty burden against real earnings
  5. 05MINORHigh investment-to-unit ratio — $275K-$499K entry cost for a 3-unit system suggests poor economies of scale and elevated per-unit risk
  6. 06MINORNo Item 19 (earnings claims) provided — cannot verify that $1.4M average revenue translates to acceptable ROI after royalties, COGS, labor, and overhead

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.