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D77/100FDD 2024

Extreme Pita — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

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Elevated Risk

27 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
27
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
26
Government-backed loans issued
Default rate
54.2%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
13 loans
Loans charged off or defaulted
Total loan volume
$4.7M
Avg loan size
$181K
Participating lenders
8

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

What drove the 77/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — franchisor may be financially unstable or unable to support franchisees
  2. 02MEDZero operating units disclosed with unknown growth trajectory — system appears to be collapsed or non-existent
  3. 03HIGHExtensive litigation history including state franchise law violations (FIPA, WFIPA, NYFSA) and breach of contract claims
  4. 04MEDMisrepresentation of financial performance alleged — Item 19 (Average Unit Volume) not disclosed, making ROI impossible to validate
  5. 05MINORNo territory protection despite $176k-$494k investment — franchisees face direct competition from other franchisees and franchisor
  6. 06MEDHigh franchise fee ($30,000) relative to apparent system viability and lack of disclosed revenue/profitability data
  7. 07MINORLease and area developer agreement disputes indicate franchisor-franchisee relationship breakdown

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.