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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
41 / 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
20
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$5.7M
Avg loan size
$285K
Participating lenders
11
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
Utah
State whose law governs disputes — relevant if you're not based there
What drove the 41/100 rating
Risk Score Breakdown
- 01MEDNet Income not disclosed in FDD Item 19 — impossible to validate profitability claims against $249.5K-$774.5K investment range
- 02MINORMinimal unit growth of 3.2% YoY suggests market saturation or franchisee dissatisfaction in beverage category with intense QSR competition
- 03MINORRoyalty floor of $2,500/month ($30,000 annually) represents 4.9% of average revenue even before percentage royalties kick in — high fixed cost burden on marginal locations
- 04MEDHigh investment range ($249.5K-$774.5K) with no disclosed net income creates inability to calculate payback period or ROI
- 05MINORBeverage-only concept typically operates on thin margins (25-35% COGS) — vulnerable to commodity price swings and traffic dependency
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.