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B65/100FDD 2025

Grabbagreen — Litigation & Risk

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

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Elevated Risk

20 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
20
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
65 / 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
8
Government-backed loans issued
Default rate
14.3%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$2.5M
Avg loan size
$317K
Participating lenders
6

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

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINORUnit count collapsed 42.9% YoY (from ~7 to 4 units) indicating severe system contraction and franchisee failure rate
  2. 02MINORNo Item 19 financial disclosure — cannot verify average unit economics, profitability, or ROI claims
  3. 03HIGHMultiple litigation cases including franchise law violations and state administrative actions in Maryland and Virginia suggest compliance/governance issues
  4. 04MINORRoyalty structure ($400/week minimum = ~$20,800/year) represents high fixed cost burden on declining unit volumes, pressure on franchisee profitability
  5. 05MINORHigh investment ceiling ($626,575) with unverified revenue/net income creates extreme downside risk without financial benchmarks
  6. 06HIGHGoing Concern = False status suggests potential financial instability or operational viability questions at franchisor level

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.