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B65/100FDD 2024

Machi Machi — Litigation & Risk

Food & Beverage - Ice Cream & Desserts · 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
Required
Disputes resolved outside court — limits your legal options
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
Minnesota
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINOROnly 4 units systemwide indicates extremely early-stage/unproven concept with minimal track record
  2. 02MINORHigh franchise fee ($200,000) relative to system size creates pressure on franchisor to recruit rather than support
  3. 03MEDNo average revenue or net income disclosed (missing Item 19) prevents ROI validation and suggests weak unit economics
  4. 04MINORWide investment range ($350K-$1.1M) suggests inconsistent unit performance or undefined build-out standards
  5. 05MINOR100% YoY unit growth from 2 to 4 units is mathematically meaningless for assessing viability
  6. 06MED5% royalty on undisclosed sales means franchisor revenue model unclear and franchisee profitability unverifiable

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.