FranchiseVerdict
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B58/100FDD 2025

It’s Boba Time — Litigation & Risk

Food & Beverage - Juice & Smoothies · FDD Items 3, 4 & 5

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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
58 / 100
FranchiseVerdict composite
Rating
MODERATE
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
91
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

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

What drove the 58/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern warning indicates potential financial distress or viability questions at franchisor level
  2. 02HIGHTwo disclosed lawsuits including fraud/CFIL violations and breach of contract suggest operational/legal instability
  3. 03MEDNo Item 19 (average unit volumes) disclosed—inability to assess actual profitability or ROI on $465k-$597k investment
  4. 04MINORUnprotected territory creates direct competition risk from other franchisees and company-owned units
  5. 05MEDModest unit growth of 13.2% YoY with only 89 locations suggests limited market traction and scaling challenges
  6. 06MED5% royalty on undisclosed revenue makes it impossible to model cash flow or breakeven timeline

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.