B61/100FDD 2026
MidnighTreats — Litigation & Risk
Food & Beverage - Ice Cream & Desserts · FDD Items 3, 4 & 5
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
61 / 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
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
Virginia
State whose law governs disputes — relevant if you're not based there
What drove the 61/100 rating
Risk Score Breakdown
- 01HIGHGoing concern status is False — indicates potential financial instability at franchisor level
- 02MEDNet income deliberately not disclosed in Item 19 — prevents accurate ROI analysis and suggests underperformance
- 03MEDOnly 4 units in system with 50% YoY growth — extremely small and unproven franchise model with limited track record
- 04MINORHigh investment range ($132,900–$296,000) relative to only $484,675 average revenue creates unfavorable payback period
- 05MINOR7% royalty on gross sales is standard but painful on thin margins when net income is hidden
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.