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B62/100FDD 2025

Gyu-Kaku — 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
62 / 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
12
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$17.7M
Avg loan size
$1.5M
Participating lenders
10

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 62/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 12.5% YoY (60 units) indicates system contraction and potential demand weakness
  2. 02MINORNo average revenue or net income disclosure (Item 19) prevents ROI validation and suggests weak unit economics
  3. 03MEDHigh initial investment ($2.3M–$4.3M) combined with undisclosed profitability creates extreme uncertainty on payback period
  4. 04MEDJapanese izakaya concept is niche with limited addressable market and high operational complexity (tableside grilling, specialized labor)
  5. 05MINORTiered royalty structure (5%→4.5%→4%) suggests franchisor depends on high-volume units; declining unit count threatens franchise support sustainability
  6. 06HIGHNo disclosed litigation but declining footprint may reflect unresolved franchisee disputes or brand performance issues

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.