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A49/100FDD 2025
Milkshake Factory — Litigation & Risk
Food & Beverage - Full Service · 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
49 / 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
6
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
$3.2M
Avg loan size
$535K
Participating lenders
5
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
Michigan
State whose law governs disputes — relevant if you're not based there
What drove the 49/100 rating
Risk Score Breakdown
- 01MINOROnly 14 units system-wide with unknown/stagnant growth trajectory raises scalability and viability concerns
- 02MINORNet income of $89,973 on $716,078 revenue (12.6% net margin) is thin; 6% royalty + operating costs leave minimal cushion
- 03MINORHigh initial investment range ($510K–$773K) against modest profitability creates extended breakeven period and elevated financial risk
- 04MEDNo Item 19 financial performance representations disclosed; cannot validate franchisor's average revenue/income claims independently
- 05MINORSmall franchise system (14 units) limits peer benchmarking, support infrastructure, and brand recognition leverage
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.