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B61/100FDD 2025
Foster's Grille — Litigation & Risk
Food & Beverage - Full 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
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
6
Government-backed loans issued
Default rate
33.3%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$1.3M
Avg loan size
$223K
Participating lenders
5
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
Virginia
State whose law governs disputes — relevant if you're not based there
What drove the 61/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern Warning: Franchisor's ability to continue operations is questioned, indicating potential financial distress or viability issues
- 02MINORStagnant Unit Growth: Only 12 units with unknown/unclear growth trajectory suggests market rejection or expansion problems
- 03MINORNo Item 19 Financial Data: Absence of average unit volumes or profitability disclosures prevents validation of the $1M average revenue claim
- 04MINORHigh Investment-to-Net-Income Ratio: $258K–$539K investment against $101K average net income yields 2.5–5.3 year payback with significant downside risk
- 05MINORThin Operating Margins: 10.2% net margin ($101K/$1M) is concerning for restaurant/food service and leaves minimal cushion for underperformance
- 06MEDUndisclosed Growth Metrics: 'Unknown growth' in a 12-unit system raises questions about transparency and whether franchisees are actually succeeding
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.