B61/100FDD 2025
Manhattan Pizza — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Moderate — Review
3 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
61 / 100
FranchiseVerdict composite
Rating
MODERATE
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
1
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$642K
Avg loan size
$642K
Participating lenders
1
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
Virginia
State whose law governs disputes — relevant if you're not based there
What drove the 61/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (average net income) disclosed — cannot verify actual profitability despite $1.6M average revenue claim
- 02MINOROnly 13 units with unknown growth trajectory — suggests stagnant or declining system
- 03HIGHMultiple litigation incidents (2014 unregistered franchise sales, 2021 personal injury, 2023 royalty default judgment) indicate compliance and relationship issues
- 04HIGHGoing Concern = False — potential financial instability at franchisor level
- 05MINORHigh initial investment ($400K-$758K) paired with unknown unit growth creates ROI uncertainty
- 06MED5.5% royalty on gross sales provides no margin cushion if net income is undisclosed
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.