D75/100FDD 2025
LYTEbite — Litigation & Risk
Food & Beverage - Full Service · 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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
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
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01MINORZero existing franchise units despite established brand — indicates system failure or pre-launch status
- 02HIGHGoing concern warning is present — franchisor may face financial viability issues
- 03MINORNo average revenue or net income disclosure (Item 19) — impossible to validate ROI claims
- 04MINORHigh investment range ($293k-$500k) with no performance benchmarks creates significant downside risk
- 05MINORUnknown unit growth trajectory — cannot assess market traction or franchisee success rates
- 06MED5% royalty on undisclosed revenues — franchisees cannot project actual take-home profitability
- 07HIGHNo disclosed litigation but going concern flag suggests underlying operational distress
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.