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D69/100FDD 2023

Gyro Shack — Litigation & Risk

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

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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
69 / 100
FranchiseVerdict composite
Rating
CAUTION
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
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
Idaho
State whose law governs disputes — relevant if you're not based there

What drove the 69/100 rating

Risk Score Breakdown

  1. 01MINORNo average net income disclosure (Item 19) prevents ROI validation—critical for $263k-$655k investment
  2. 02MINOROnly 6 units systemwide suggests minimal scale, unproven model, and high failure risk
  3. 03MINORUnknown unit growth trajectory indicates possible contraction or stagnation
  4. 04MINORNo territory protection allows franchisor to saturate local markets and cannibalize sales
  5. 05HIGHGoing Concern status of False raises solvency questions about franchisor viability
  6. 06MINORWide investment range ($392k spread) suggests inconsistent unit economics or hidden costs
  7. 07MINOR6% royalty on $513k average revenue = $30.8k annual fee with unknown profitability baseline

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.