A46/100FDD 2025
Marco's Pizza — Litigation & Risk
Food & Beverage - Pizza · FDD Items 3, 4 & 5
Elevated Risk
16 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
16
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
46 / 100
FranchiseVerdict composite
Rating
STRONG
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
460
Government-backed loans issued
Default rate
7.6%
vs <3% typical · system-wide
5-yr default rate
4.8%
Defaults
21 loans
Loans charged off or defaulted
Total loan volume
$164.4M
Avg loan size
$357K
Participating lenders
95
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
Ohio
State whose law governs disputes — relevant if you're not based there
What drove the 46/100 rating
Risk Score Breakdown
- 01MINORNo Item 19 (Average Net Income) disclosure — cannot verify actual profitability claims despite $934K average revenue
- 02HIGHMultiple ongoing litigation cases involving former area representatives (American Eagle, KAM Development) and franchisor collection actions suggest systemic relationship issues
- 03MINORSlow unit growth (4.0% YoY) combined with collection actions against former franchisees indicates potential performance/retention problems
- 04MINORHigh investment range ($286K-$807K) with 5.5% royalty lacks transparency on typical break-even timeline without net income data
- 05HIGHPattern of franchisor-initiated litigation (J&J ZA, FirstSlice, Cajunland Pizza) raises questions about enforcement practices and franchisee support quality
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.