FranchiseVerdict
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D72/100FDD 2025

Jomaru Korean Hot Pot — Litigation & Risk

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

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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
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 72/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern status is FALSE — indicates potential financial distress or structural issues at franchisor level
  2. 02MINOROnly 3 units in system with unknown growth trajectory — extremely small and unproven concept with no demonstrated unit economics
  3. 03MEDNo Item 19 financial disclosure (Avg Revenue/Net Income not disclosed) — impossible to validate ROI or profitability claims
  4. 04MINORHigh initial investment ($349.5K–$590K) relative to system size creates disproportionate risk with minimal proven model
  5. 05MINOR5-year term is short for capital-intensive restaurant concept — limits payback period and increases renewal uncertainty
  6. 06MEDNo disclosed franchisor financial statements — unable to assess franchisor viability or support infrastructure

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.