D74/100FDD 2023
Genghis Grill — 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
74 / 100
FranchiseVerdict composite
Rating
CAUTION
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
14
Government-backed loans issued
Default rate
15.4%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$9.2M
Avg loan size
$657K
Participating lenders
7
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
Nevada
State whose law governs disputes — relevant if you're not based there
What drove the 74/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 4.8% YoY (49 units) — shrinking system indicates weak unit economics or franchisee dissatisfaction
- 02MINORNo Item 19 financial disclosure — cannot verify average unit volumes, profitability, or ROI claims
- 03MEDHigh investment range ($400K-$1.18M) with no disclosed average revenue creates opacity around payback period
- 04MINORRoyalty floor of $500/month ($6K annually) means even struggling units must pay fixed costs
- 05MINORCasual dining/fast-casual segment highly competitive with thin margins — model vulnerable to labor cost inflation
- 06MINORNo growth trajectory evident — declining unit count suggests brand struggles with franchisee recruitment or retention
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.