B65/100FDD 2026
K-roll Yumsem — 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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
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
Washington
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MINORZero existing franchise units with unknown growth trajectory indicates either pre-revenue stage or failed system expansion
- 02MEDFinancial performance metrics (revenue and net income) completely undisclosed — unable to validate ROI or profitability claims
- 03MINORNo protected territory creates direct competition risk from other franchisees and company-owned locations in same area
- 04MINORWide investment range ($217k-$421k, 94% spread) suggests undefined unit economics or highly variable startup costs
- 05MED5-year term is shorter than industry standard (typically 10 years), creating renewal uncertainty and limited payback window
- 06MINOR4% royalty appears low but profitability baseline unknown — cannot assess true cost burden without Item 19 financial 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.