A45/100FDD 2025
Kona Ice — Litigation & Risk
Food & Beverage - Ice Cream & Desserts · 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
45 / 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
33
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$5.1M
Avg loan size
$156K
Participating lenders
25
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
Kentucky
State whose law governs disputes — relevant if you're not based there
What drove the 45/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Average Revenue/Net Income) disclosed — impossible to validate ROI claims or profitability benchmarks
- 02MINORModest unit growth of 8.7% YoY suggests market saturation or franchisee struggles in a seasonal business model
- 03MINORFlat/low royalty structure ($3,000–$5,000/year) may indicate franchisor dependency on franchise fees rather than system health
- 04MEDHigh initial investment ($178k–$227k) relative to disclosed information creates unquantified risk exposure
- 05MINORSeasonal revenue model (frozen treats) creates cash flow vulnerability; no disclosure of off-season survival strategies
- 06MED10-year term is relatively long; redemption/exit clauses not disclosed
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.