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A46/100FDD 2025
Great American Cookies — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Elevated Risk
8 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
46 / 100
FranchiseVerdict composite
Rating
STRONG
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
89
Government-backed loans issued
Default rate
4.7%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$26.9M
Avg loan size
$302K
Participating lenders
48
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 46/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-1.2% YoY) indicates contracting franchise system with 395 units and negative momentum
- 02MINORMultiple active securities class action lawsuits against parent FAT Brands and officers raise governance and transparency concerns
- 03MEDNet income not disclosed in FDD despite $539,902 average revenue, preventing accurate ROI calculation and profitability verification
- 04MINORZero territory protection exposes franchisees to direct competition from other GAC locations and parent company cannibalization
- 05MINORState regulatory actions against affiliates for registration and financial reporting inaccuracies suggest systemic compliance issues
- 06MINOR6% royalty on declining average revenues ($539,902) may not support franchisor infrastructure as system contracts
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.