FranchiseVerdict
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B64/100FDD 2025

Jason's Deli — Litigation & Risk

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

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
64 / 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
14
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
$10.3M
Avg loan size
$738K
Participating lenders
11

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

What drove the 64/100 rating

Risk Score Breakdown

  1. 01MINORSystem shrinking significantly (-5.2% YoY with only 236 units remaining suggests below critical mass)
  2. 02MINORNo financial disclosure (Item 19 absent) — cannot validate $1.7M-$2.5M investment ROI claims
  3. 03HIGHGoing Concern status 'False' indicates franchisor financial instability or viability questions
  4. 04MINORMultiple employment discrimination lawsuits (disability, pregnancy, sex) suggest systemic HR/compliance issues
  5. 05MINORNo protected territory — franchisees compete directly with other Jason's Deli locations and must defend market share
  6. 06MINORHigh initial investment ($1.7M+) with mandatory $2,500/month minimum royalty even during slow periods
  7. 07MINORDeclining unit count suggests franchisees are not renewing or existing locations are underperforming

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.