D68/100FDD 2025
Mr. Charlie’s Told Me So — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
68 / 100
FranchiseVerdict composite
Rating
CAUTION
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 68/100 rating
Risk Score Breakdown
- 01MINOROnly 2 units in system with unknown growth trajectory suggests stagnant or shrinking franchise network
- 02HIGHActive litigation involving ownership disputes and alleged fund diversion raises governance and financial integrity concerns
- 03HIGHGoing Concern status is FALSE — indicates financial distress or sustainability questions at corporate level
- 04MEDNet income not disclosed despite $1.35M average revenue — opacity on profitability is a major red flag
- 05MINORHigh investment range ($282K-$697K) relative to tiny 2-unit system increases franchisee risk significantly
- 06MINOR5% royalty on gross sales (not net) means franchisor profits even when franchisees lose money
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.