A53/100FDD 2025
Fresca Palapa — Litigation & Risk
Food & Beverage - Quick 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
53 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 53/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is False — franchisor may face financial viability issues despite healthy unit economics
- 02MINORExplosive 50% YoY unit growth may indicate unsustainable expansion or inflated recruitment claims rather than organic demand
- 03MEDNo Item 19 financial performance representations disclosed — franchisees cannot independently verify the $238,739 average net income claim
- 04MINORWide investment range ($153,200-$303,900) suggests inconsistent build-out costs or undefined territory sizes, creating unpredictable capital requirements
- 05MINOROnly 14 units system-wide limits franchisee support infrastructure and brand recognition leverage
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.