D69/100FDD 2023
Jreck Subs — Litigation & Risk
Food & Beverage - Full Service · 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
69 / 100
FranchiseVerdict composite
Rating
CAUTION
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
5
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
$473K
Avg loan size
$95K
Participating lenders
3
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
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
New York
State whose law governs disputes — relevant if you're not based there
What drove the 69/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial performance data disclosed — impossible to validate ROI claims or average unit economics
- 02HIGHGoing Concern status is FALSE, indicating potential financial instability at corporate level
- 03MEDOnly 28 units system-wide with unknown growth trajectory — suggests limited scale and unproven scalability
- 04MINORZero territory protection — franchisees face direct competition from other Jreck locations and cannibalization risk
- 05MINORWide investment range ($127.5K–$428.5K) without corresponding revenue transparency suggests inconsistent unit performance
- 06MED6.5% royalty on undisclosed revenues creates cash flow uncertainty for franchisees with no baseline expectations
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.