FranchiseVerdict
First Watch logo
B59/100FDD 2023

First Watch — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

Back to overview

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
59 / 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
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.8M
Avg loan size
$938K
Participating lenders
4

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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 financial performance data disclosed — cannot verify if $1.2M-$2M investment generates positive ROI
  2. 02MINORHigh initial investment ($1.2M-$2M) with 4% royalty requires substantial sales to break even; no average unit volume provided
  3. 03MINOR14.9% YoY unit growth is solid but system size (474 units) is relatively small; vulnerability to localized economic downturns
  4. 04MINORFranchise fee ($40K) low relative to total investment, suggesting high operating costs and thin margins
  5. 05HIGHNo going concern disclaimer listed, but lack of financial transparency raises questions about franchisor stability and franchisee profitability

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.