FranchiseVerdict
HHC logo
B59/100FDD 2025

Hhc — Litigation & Risk

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

Back to overview

Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
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
3 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
Nevada
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 financial performance representation disclosed — impossible to validate ROI claims or assess realistic earning potential
  2. 02HIGHGoing concern status is FALSE, indicating potential financial instability or undisclosed operational challenges at franchisor level
  3. 03HIGHState litigation in Virginia for unregistered franchise sales demonstrates regulatory non-compliance and consumer protection violations
  4. 04MINORExtreme unit growth of 142.9% YoY is unsustainable and suggests aggressive recruitment over franchisee success focus; system may be top-heavy
  5. 05MEDHigh investment range ($670K–$1.76M) combined with 6% royalties creates significant breakeven burden without disclosed average revenues
  6. 06MINORFranchise fee ($50K) appears low relative to total investment, suggesting hidden costs or aggressive upselling of equipment/inventory

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.