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A41/100FDD 2025

Mr. Gatti’s FEC — Litigation & Risk

Food & Beverage - Pizza · FDD Items 3, 4 & 5

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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
41 / 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
24
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 41/100 rating

Risk Score Breakdown

  1. 01MEDNet income not disclosed in Item 19 — unable to verify profitability claims against $2.57M average revenue
  2. 02HIGH2019 litigation with $200k settlement suggests contract/operational disputes; lack of admission complicates future risk assessment
  3. 03MEDHigh initial investment ($2.14M–$3.84M) combined with undisclosed net income creates difficulty calculating ROI and payback period
  4. 04HIGHGoing Concern status = False is ambiguous; clarify whether this applies to franchisor or means non-disclosure of going concern issues
  5. 05MEDModest growth rate of 14.5% YoY with only 89 units suggests limited system maturation and economies of scale

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.