FranchiseVerdict
Jazen Tea® logo
D72/100FDD 2024

Jazen Tea® — Litigation & Risk

Food & Beverage - Coffee & Tea · 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
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MEDSystem contracting sharply: 13 units with -9.1% YoY decline indicates deteriorating franchise health and market viability
  2. 02MINORNo financial performance disclosure (Item 19): Absence of average unit revenue and net income prevents ROI validation and hides profitability concerns
  3. 03HIGHGoing Concern status is FALSE: Franchisor may have disclosed financial instability or operational challenges to the FTC
  4. 04MEDHigh capital requirement ($182.6K–$389.9K) paired with undisclosed returns creates significant investment risk without performance benchmarks
  5. 05MINORLack of transparency on unit economics: 4% royalty structure cannot be evaluated without knowing actual sales figures or net margins
  6. 06MINORShrinking franchisee base suggests high failure rate, poor unit support, or unsustainable business model in beverage retail sector

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.