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D72/100FDD 2025

Makenna Koffee — Litigation & Risk

Food & Beverage - Coffee & Tea · 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
72 / 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
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MEDOnly 2 units in entire system indicates nascent/stalled growth with no disclosed unit growth trajectory
  2. 02HIGHGoing Concern = False signals potential financial instability or corporate viability issues
  3. 03MINORNo Item 19 (average revenue/net income) disclosure prevents ROI validation and suggests franchisor cannot demonstrate unit profitability
  4. 04MINORWide investment range ($441K-$1.192M) with no clarity on what drives cost variance or expected returns at each tier
  5. 05MED6% royalty on undisclosed sales figures makes it impossible to calculate actual break-even timeline or profit margins
  6. 06MINORExtremely small franchisee base (2 units) eliminates meaningful peer validation and suggests difficulty recruiting/retaining franchisees
  7. 07HIGHNo disclosed litigation but Going Concern status suggests potential underlying legal or financial disputes

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.