FranchiseVerdict
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F84/100FDD 2025

Long John Silver's — Litigation & Risk

Food & Beverage - Quick 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
84 / 100
FranchiseVerdict composite
Rating
AVOID
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
45
Government-backed loans issued
Default rate
27.3%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
12 loans
Loans charged off or defaulted
Total loan volume
$26.0M
Avg loan size
$578K
Participating lenders
28

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
1 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
Kentucky
State whose law governs disputes — relevant if you're not based there

What drove the 84/100 rating

Risk Score Breakdown

  1. 01MEDSevere unit decline of 13.5% YoY (485 units) indicates systemic contraction and loss of franchisee confidence
  2. 02MINORNo average revenue or net income disclosure (Item 19) prevents informed ROI analysis and suggests poor unit economics
  3. 03MEDHigh initial investment range ($690.5K-$4.16M) with 5-6% royalties on undisclosed revenues creates profitability uncertainty
  4. 04MED20-year term locks franchisees into declining brand with limited exit options
  5. 05MINORNon-traditional restaurant format requiring 6% royalty on likely lower volumes suggests margin compression strategy

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.