FranchiseVerdict
Hickory River Smokehouse logo
D68/100FDD 2025

Hickory River Smokehouse — Litigation & Risk

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

Back to overview

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
68 / 100
FranchiseVerdict composite
Rating
CAUTION
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
2
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
$523K
Avg loan size
$262K
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

What drove the 68/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 16.7% year-over-year (5 units represents a contracting system with high failure/non-renewal rate)
  2. 02MEDNet income not disclosed in FDD Item 19 — unable to validate profitability claims or ROI despite $315k-$1.08M investment requirement
  3. 03HIGHGoing concern status is FALSE — suggests financial instability or operational uncertainty at franchisor level
  4. 04MINORWide investment range ($769,500 spread) indicates inconsistent unit economics and unpredictable startup costs
  5. 05MINORNo territory protection — franchisees face direct competition from other Hickory River locations and cannibalization risk
  6. 06MINOR5% royalty on gross sales (not net) means royalties owed even during loss-making periods
  7. 07MEDOnly 5 units in system creates minimal franchisee network, limited peer support, and questions about viability

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.