FranchiseVerdict
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B55/100FDD 2025

Long Island Bagel Café — Litigation & Risk

Food & Beverage - Full Service · 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
55 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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
New York
State whose law governs disputes — relevant if you're not based there

What drove the 55/100 rating

Risk Score Breakdown

  1. 01MINORNo net income disclosure (Item 19) prevents accurate ROI assessment on $585K-$882K investment
  2. 02MINOROnly 7 units with unknown growth trajectory suggests stagnant or declining system
  3. 03HIGHGoing Concern status = false indicates potential financial instability at corporate level
  4. 04MEDHigh royalty base (5% of gross sales) with undisclosed profitability makes break-even unclear
  5. 05MINORAverage revenue of $313K per unit appears modest for QSR category, limiting franchisee upside
  6. 06MINOR10-year term is lengthy commitment with minimal franchise support infrastructure (7-unit system)

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.