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A49/100FDD 2026
Jeff's Bagel Run — Litigation & Risk
Food & Beverage - Bakery · FDD Items 3, 4 & 5
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
49 / 100
FranchiseVerdict composite
Rating
STRONG
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
2
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.2M
Avg loan size
$618K
Participating lenders
2
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
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 49/100 rating
Risk Score Breakdown
- 01MINORExplosive unit growth of 1300% YoY suggests either brand-new franchise system or unsustainable expansion; lack of historical data makes validation difficult
- 02MINORNet income of $162,392 on $1,168,032 revenue represents only 13.9% net margin — below industry standards for QSR bagel concepts, raising profitability sustainability questions
- 03MINORHigh investment range ($575K–$998K) combined with modest average net income creates 3.5–6.1 year breakeven timeline with no margin for error
- 04MEDOnly 25 units in system creates limited franchisee reference pool and suggests early-stage franchise with unproven scalability and support infrastructure
- 05MEDNo Item 19 (financial performance representations) disclosed; franchisor is not substantiating the $1.17M revenue and $162K net income claims with audited data
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.