FranchiseVerdict
FASTFRAME logo
D68/100FDD 2024

Fastframe — Litigation & Risk

Retail · FDD Items 3, 4 & 5

Back to overview

Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
68 / 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
8
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.9M
Avg loan size
$233K
Participating lenders
5

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 68/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 2.5% YoY indicates shrinking system despite 39-unit base
  2. 02MINORTwo franchisor-initiated royalty collection lawsuits suggest payment disputes and cash flow stress among franchisees
  3. 03MEDNo disclosed average revenue or net income data prevents ROI validation and suggests weak unit economics
  4. 04MINORHigh initial investment range ($135K-$246K) paired with 6% royalty creates significant fixed cost burden
  5. 05HIGHGoing concern status indicates potential solvency questions at franchisor level
  6. 06MINORDeclining unit count contradicts the typical growth narrative needed to justify franchise expansion

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.