Hurricane Grill & Wings / Hurricane Burgers Tacos Wings: Litigation & Risk
Full-Service Restaurants · FDD Items 3, 4 & 5
Elevated Risk
9 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 9
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 53 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 5
- Government-backed loans issued
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- N/A
- Loans charged off or defaulted
- Total loan volume
- $2.5M
- Avg loan size
- $494K
- Participating lenders
- 5
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
- Not waived
- 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
- CA
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Pending: (1) Mitchell Kates v. FAT Brands securities class action (2024); (2) Franchisee group (20 plaintiffs) v. Hurricane AMT marketing fund misuse (2024). Franchisor-initiated: 6 AAA arbitration demands filed April 2025 against former franchisees for payment/inspection obligations. Several concluded cases involving FAT Brands securities litigation and affiliate regulatory matters.
What drove the 53/100 verdict
Risk Score Breakdown
- 01MEDUnit count declined 5.0% YoY (41 units) indicating system contraction and potential franchisee struggles
- 02HIGHActive litigation including putative class action on securities statements and franchisee lawsuit over marketing fund misuse suggests governance and transparency issues
- 03MINORNo net income disclosure despite $1.77M average revenue raises profitability questions and transparency concerns
- 04HIGHMultiple concluded litigation actions (securities class actions, registration violations, breach of contract disputes) indicate chronic compliance and relationship management problems
- 05HIGHGoing concern status is FALSE — potential financial distress at franchisor level threatens support and viability
- 06MINORHigh investment range ($539K–$2.9M) combined with 6% royalty creates significant financial burden with unproven return
- 07MINORArbitration demands initiated against former franchisees suggests adversarial franchisor-franchisee relationships and potential disputes over obligations
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.