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B63/100FDD 2024

LaRosa’s — Litigation & Risk

Food & Beverage - Pizza · 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
63 / 100
FranchiseVerdict composite
Rating
MODERATE
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
7
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

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
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
Ohio
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 3.5% YoY indicates system contraction and potential market saturation or franchisee dissatisfaction
  2. 02MINORNo Item 19 (average revenue/net income) disclosure prevents ROI validation and suggests financials may not support the $1.4M–$2.6M investment range
  3. 03MEDHigh initial investment ($1.4M–$2.6M) combined with 4% royalty and undisclosed profitability creates significant downside risk without transparency
  4. 04MED64-unit system is relatively small; limited scale creates operational vulnerability and reduces support infrastructure compared to larger franchisors
  5. 05MINOR10-year term is longer than industry standard (5–7 years typical), locking franchisees into unfavorable renewal negotiations

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.