F91/100FDD 2025
Happy's Pizza — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
91 / 100
FranchiseVerdict composite
Rating
AVOID
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
11
Government-backed loans issued
Default rate
40.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
4 loans
Loans charged off or defaulted
Total loan volume
$4.7M
Avg loan size
$428K
Participating lenders
4
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
Michigan
State whose law governs disputes — relevant if you're not based there
What drove the 91/100 rating
Risk Score Breakdown
- 01HIGHCriminal indictment of co-founders for conspiracy to defraud U.S. and tax fraud raises fundamental integrity and leadership concerns
- 02HIGHActive civil litigation by investors alleging false representations about liquor licenses indicates systematic misrepresentation to franchisees
- 03HIGHGoing Concern status is FALSE, suggesting potential financial distress or viability questions at corporate level
- 04MINORSystem shrinking at -5.3% YoY (54 units) indicates declining franchisee confidence and market rejection
- 05MEDNet income not disclosed despite $1.07M average revenue—transparency red flag suggesting poor unit-level profitability
- 06MEDHigh investment range ($263.7K–$619.3K) combined with $1.5K monthly royalties creates significant franchisee debt burden relative to undisclosed margins
- 07HIGHCriminal defendants (Asker and Bashi) still in active management poses ongoing reputational and operational risk
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.