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B65/100FDD 2026

Mensho — Litigation & Risk

Food & Beverage - Full Service · 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
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 65/100 rating

Risk Score Breakdown

  1. 01MINORExplosive unit growth (500% YoY) suggests either aggressive expansion or unreliable reporting; only 10 units total indicates nascent system with unproven scalability
  2. 02MEDNo Item 19 financial performance disclosure (Avg Revenue and Net Income not disclosed) prevents validation of profitability claims and return on investment
  3. 03MINORWide investment range ($578K–$3.46M) without corresponding revenue/profitability data creates opacity around ROI expectations and cost structure
  4. 04HIGHGoing Concern = False suggests franchisor financial stability concerns or accounting red flags requiring immediate clarification
  5. 05MEDExtremely young system (10 units) means limited franchisee track record, no long-term operational data, and higher failure risk for early adopters

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.