B60/100FDD 2025
Liberty Bagels — Litigation & Risk
Food & Beverage - Bakery · 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
60 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
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
New York
State whose law governs disputes — relevant if you're not based there
What drove the 60/100 rating
Risk Score Breakdown
- 01MINOROnly 4 units in entire system indicates extremely small/nascent franchise with no proven scalability or support infrastructure
- 02HIGHNo Item 19 financial performance representations (Going Concern = False) — cannot verify if average revenues of $4.6M and net income of $1.4M are actually achievable by franchisees
- 03MINORUnknown unit growth trajectory is critical gap — unclear if system is expanding, stagnant, or contracting
- 04MINORHigh investment range ($804K-$1.3M) relative to system size creates illiquidity risk and limits exit options
- 05MEDTiny franchisee base (4 units) means minimal peer support network, limited operational best practices sharing, and insufficient data for validation
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.