B55/100FDD 2025
Kitchen Refresh — Litigation & Risk
Food & Beverage - Quick Service · FDD Items 3, 4 & 5
Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
55 / 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
North Dakota
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01MINORRegulatory violation: Minnesota Department of Commerce Consent Order (March 2022) for selling franchises without effective registration and offering rescissions
- 02MEDMissing critical financial disclosure: Net income not disclosed despite $985,899 average revenue claim—prevents accurate ROI calculation
- 03MINORUnknown royalty structure: Lack of transparency on ongoing fees creates unpredictable cost burden and suggests potential compliance issues
- 04MINORExtremely rapid unit growth (166.7% YoY): Only 8 units total makes growth percentage unstable and system maturity questionable
- 05MINORZero franchise fee with $0 barrier to entry: Highly unusual model that may indicate difficulty attracting franchisees or reliance on royalties for franchisor revenue
- 06MEDNo Item 19 financial performance representations: Without disclosed net income, cannot validate the $985,899 average revenue claim or assess unit economics
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.