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B56/100FDD 2025
Feng Cha — Litigation & Risk
Food & Beverage - Quick 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
56 / 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
4
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.7M
Avg loan size
$913K
Participating lenders
2
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 56/100 rating
Risk Score Breakdown
- 01MEDNo average revenue or net income disclosed (Item 19 absent) — impossible to validate ROI on $246k-$663k investment
- 02MINORSlow unit growth (8.3% YoY) suggests market saturation or franchisee dissatisfaction in tea/beverage category
- 03MINORUnprotected territory creates direct competition risk between franchisees in same market
- 04MINORWide investment range ($417k spread) indicates inconsistent buildout costs and unclear profitability benchmarks
- 05MED10-year term with no disclosed exit clauses or renewal terms creates long-term commitment uncertainty
- 06MINORHigh relative initial investment ($35k franchise fee) for beverage concept with no performance data to justify it
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.