FranchiseVerdict
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B63/100FDD 2023

hoots wings — Litigation & Risk

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

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Elevated Risk

9 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
9
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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
Georgia
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 financial disclosure (average unit volume and net income not provided) - impossible to assess actual profitability or ROI on $414.5K-$1.132M investment
  2. 02MINORAggressive unit growth (33.3% YoY) with only 14 total units suggests either rapid expansion phase with unproven model or cherry-picked growth period
  3. 03HIGHMultiple litigation cases involving franchisor affiliates covering breach of contract, trademark disputes, non-compete enforcement, and unpaid royalty arbitrations indicate systemic disputes with franchisees
  4. 04HIGHGoing Concern status is ambiguous - requires clarification on whether this applies to franchisor stability or specific unit performance issues
  5. 05MED5% royalty on gross sales with no disclosed net income prevents assessment of actual franchisee profitability or break-even timeline
  6. 06HIGHBankruptcy-related adversary proceeding in litigation history suggests financial distress within franchise system

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.