F80/100FDD 2026
My Favorite Muffin — Litigation & Risk
Food & Beverage - Bakery · 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
80 / 100
FranchiseVerdict composite
Rating
AVOID
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
31
Government-backed loans issued
Default rate
30.8%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
8 loans
Loans charged off or defaulted
Total loan volume
$6.1M
Avg loan size
$197K
Participating lenders
22
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
Illinois
State whose law governs disputes — relevant if you're not based there
What drove the 80/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — suggests financial instability or unresolved operational issues at corporate level
- 02MEDNet Income not disclosed in Item 19 — unable to validate actual profitability; $781k average revenue may not translate to acceptable owner earnings
- 03MINOROnly 12 units with unknown growth trajectory — extremely small system raises questions about scalability, support infrastructure, and corporate viability
- 04MINORTerritory not protected — franchisees face direct competition from other franchisees and corporate-owned locations; market saturation risk
- 05MEDHigh investment range ($297.5k–$747.5k) relative to system size and undisclosed profitability — unfavorable risk/reward ratio
- 06MINOR5% royalty on gross revenue during potential negative cash flow periods — burdensome given lack of profitability disclosure
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.