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A52/100FDD 2024

Great Steak — 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
52 / 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
1
Government-backed loans issued
Default rate
100.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$415K
Avg loan size
$415K
Participating lenders
1

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 52/100 rating

Risk Score Breakdown

  1. 01MINORSystem shrinking at -4.0% YoY (24 units) indicates declining franchisee success and potential market saturation
  2. 02HIGHMultiple ongoing litigations including Washington Franchise Investment Protection Act violations and misrepresentation claims suggest franchisor credibility issues
  3. 03MINORNo average net income disclosure (Item 19) prevents accurate ROI assessment despite $153.5K-$662.8K investment range
  4. 04MINORRoyalty floor of $400/week ($20,800/year) is aggressive relative to average revenue of $579,903, creating cash flow pressure in slow periods
  5. 05MINORUnprotected territory creates direct competition risk from other Great Steak franchisees in same market
  6. 06HIGHLitigation history includes state administrative consent orders, indicating regulatory enforcement actions
  7. 07MEDHigh investment ceiling ($662,850) with unit decline suggests franchisor pushing larger formats that underperform

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.