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B63/100FDD 2024

Le Macaron French Pastries — Litigation & Risk

Food & Beverage - Bakery · FDD Items 3, 4 & 5

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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
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
17
Government-backed loans issued
Default rate
66.7%
vs <3% typical · system-wide
5-yr default rate
50.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$4.3M
Avg loan size
$252K
Participating lenders
11

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

Contract Risk Indicators

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

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MEDSystem contracting sharply: -5.2% unit decline YoY with only 60 units remaining suggests market saturation or operational challenges
  2. 02MINORNo financial disclosure: Absence of Item 19 (Average Unit Volume) prevents validation of 6% royalty burden against actual profitability
  3. 03HIGHActive litigation with appeal/remand: Franchisor sued franchisee for breach; case still unresolved indicates potential contract enforcement issues and ongoing legal risk
  4. 04MEDHigh initial investment ($154K–$454K) without disclosed average revenue creates extreme uncertainty on ROI timeline
  5. 05HIGHGoing concern: False flag indicates potential financial instability of franchisor, threatening support infrastructure and system viability
  6. 06MED10-year term with 6% royalty on undisclosed sales creates long-term commitment to unproven economics
  7. 07MINORCompetitive pastry market: French pastry concepts face intense competition from established bakeries, chains, and local operators

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.