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B61/100FDD 2025

Flame Broiler — Litigation & Risk

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

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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
61 / 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
27
Government-backed loans issued
Default rate
4.5%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$5.0M
Avg loan size
$187K
Participating lenders
15

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 61/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 7.5% YoY (125 units) — indicates system contraction and weak franchisee performance or retention
  2. 02MINORNo average revenue or net income disclosure (Item 19) — impossible to validate ROI claims or benchmark profitability
  3. 03MINORUnprotected territory — franchisees face direct competition from other Flame Broiler units and no exclusivity guarantee
  4. 04MEDHigh investment range ($464K–$776K) paired with 5% royalty on undisclosed sales — difficult to model payback period
  5. 05MINOR10-year term with $35K franchise fee — long commitment with moderate upfront cost and ongoing 5% drain on profits
  6. 06HIGHNo 'Going Concern' flag in FDD suggests potential financial stability issues with 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.