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B60/100FDD 2025

Farmer Boys — 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
60 / 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
20
Government-backed loans issued
Default rate
10.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$21.4M
Avg loan size
$1.1M
Participating lenders
6

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 60/100 rating

Risk Score Breakdown

  1. 01MINORStagnant unit growth at 1.4% YoY indicates system maturation or contraction pressure with only 102 units
  2. 02MEDNet income not disclosed in Item 19 prevents accurate ROI analysis and profit transparency
  3. 03HIGHRecent litigation ($903k+ awarded against franchisees) suggests franchise relationship tensions and enforcement issues
  4. 04MEDHigh initial investment ($1.6M-$3.2M) paired with undisclosed profitability creates significant capital-at-risk exposure
  5. 05HIGHNo going concern statement raises questions about franchisor financial stability and long-term viability

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.