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B65/100FDD 2025

Little Kitchen Academy — Litigation & Risk

Other · 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
65 / 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
Delaware
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINOROnly 2 existing units with unknown growth trajectory suggests minimal track record and severe scalability concerns
  2. 02MEDNet income not disclosed in FDD Item 19 makes ROI analysis impossible; average revenue of $560k may not translate to viable owner income
  3. 03MINORWide investment range ($436k-$881k) with vague cost allocation raises transparency concerns and suggests inconsistent build-out standards
  4. 04MED6% royalty on gross sales (not net) combined with non-disclosed profitability creates cash flow risk
  5. 05MEDExtremely limited franchisee base (2 units) makes validation difficult and indicates franchisor may be pre-revenue or in early survival mode

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.