A48/100FDD 2025
Elevation Burger — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Elevated Risk
8 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
48 / 100
FranchiseVerdict composite
Rating
STRONG
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
3
Government-backed loans issued
Default rate
33.3%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$1.7M
Avg loan size
$570K
Participating lenders
3
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
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 48/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 8.6% YoY (36 units) indicating system contraction and potential viability concerns
- 02MINORParent company FAT Brands facing active securities class action lawsuits with officer involvement suggesting corporate governance/transparency issues
- 03MEDNet Income not disclosed in FDD Item 19 makes ROI analysis impossible and prevents informed investment decisions
- 04MINORRegulatory settlement with Virginia over franchise registration and financial reporting inaccuracies indicates compliance failures and potential misrepresentation to franchisees
- 05MINORHigh investment range ($517K-$1.99M) combined with declining unit count suggests franchisees are struggling to achieve adequate returns
- 06MINOR6% royalty on average $1.08M revenue ($64,800 annually) represents meaningful ongoing cost in contracting 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.