B61/100FDD 2026
El Fresco Mexican Grill — Litigation & Risk
Food & Beverage - Full Service · 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
61 / 100
FranchiseVerdict composite
Rating
MODERATE
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
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
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 61/100 rating
Risk Score Breakdown
- 01MINOROnly 4 existing units with unknown/stalled growth trajectory raises sustainability questions
- 02MINORNo net income disclosure (Item 19) prevents accurate ROI assessment and suggests weak or inconsistent profitability
- 03HIGHGoing Concern status is FALSE, indicating potential financial viability concerns at corporate level
- 04MEDHigh investment range ($353k-$605k) against only 4 units suggests limited franchisor track record and unproven unit economics
- 05MINOR5% royalty on $1M average revenue ($50k annually) may be insufficient to support franchisor operations with only 4 units
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.