Filta Environmental Kitchen Solutions: Litigation & Risk
Full-Service Restaurants · FDD Items 3, 4 & 5
Moderate: Review
1 case disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 95 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 49
- Government-backed loans issued
- Charge-off rate
- 8.2%
- vs 16% franchise average
- 5-yr charge-off rate
- 0.0%
- Defaults
- 4 loans
- Loans charged off or defaulted
- Total loan volume
- $10.3M
- Avg loan size
- $210K
- Participating lenders
- 17
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
- FL
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
One concluded action: David G. Cooke v. The Filta Group, Inc. (2016), alleging conversion and Tennessee Consumer Protection Act violations. Settled December 2016 with Filta reimbursing Cooke for certain obligations.
What drove the 95/100 verdict
Risk Score Breakdown
- 01MEDNet income not disclosed in Item 19 — unable to validate actual profitability claims against $910k average revenue
- 02MINORSlow unit growth (4.4% YoY) suggests market saturation or franchisee satisfaction issues in a 355-unit system
- 03HIGHLitigation history involving franchisee exit disputes and TCPA violations raises concerns about contract enforcement and franchisor conduct
- 04MINORHigh initial investment ($123.6k-$139.25k) combined with declining royalty floor ($650/month minimum) suggests tight unit economics
- 05MINORRoyalty structure creates ambiguity — franchisees paying either declining % or $650 minimum means low-revenue locations subsidize franchisor
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.