D72/100FDD 2025
New York Fries — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Elevated Risk
6 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
6
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
2
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
Total loan volume
$220K
Avg loan size
$110K
Participating lenders
2
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
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 72/100 rating
Risk Score Breakdown
- 01MINOROnly 4 operating units suggests a collapsing or stalled franchise system with minimal growth trajectory
- 02MINORSix pending legal actions against parent company involving misrepresentation and breach of contract indicate systemic operational or disclosure issues
- 03MEDNo average revenue or net income disclosed (missing Item 19) prevents accurate ROI assessment on $450k-$1.2M investment
- 04MINORUnprotected territory creates direct competition risk—franchisees can cannibalize each other's sales in same market
- 05MED6% royalty on undisclosed revenue streams makes profitability modeling impossible; combined with $30k fee, margin sustainability is unclear
- 06MINOR10-year term with only 4 units suggests poor franchisee retention and high failure/exit rates
- 07HIGHParent company litigation in multiple countries (Canada, India) indicates franchise model may be fundamentally flawed or misrepresented
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.