Mr. Gatti's: Litigation & Risk
Full-Service Restaurants · FDD Items 3, 4 & 5
Elevated Risk
1 case disclosed in FDD Items 3 and 4. Bankruptcy disclosed in Item 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- Disclosed
- Franchisor or officer bankruptcy
- Verdict score
- 40 / 100
- FranchiseVerdict composite · higher is better
- Rating
- C
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 23
- Government-backed loans issued
- Charge-off rate
- 34.8%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 8 loans
- Loans charged off or defaulted
- Total loan volume
- $8.0M
- Avg loan size
- $346K
- Participating lenders
- 16
FDD Items 5, 6 & 17: What You Give Up
Contract Risk Indicators
- Mandatory arbitration
- Not required
- You retain the right to sue in court
- 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
Extracted from FDD Item 3
Litigation Detail
One settled action (2019) by a franchisee against predecessor Gatti's Great Pizza, Inc. and its owners (Phillips, Mann) alleging breach of contract related to purchase of 13 former company-affiliated facilities; settled for $200,000 in rent subsidies without admission of liability. No pending or concluded matters against the franchisor directly, and no litigation against franchisees in the last fiscal year.
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.