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D72/100FDD 2025

Nite Creamery — Litigation & Risk

Food & Beverage - Ice Cream & Desserts · FDD Items 3, 4 & 5

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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
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
1
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
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINOROnly 2 existing units indicates nascent/stalled system with no demonstrated scalability or franchisee success proof
  2. 02MEDNo average revenue or net income disclosed (missing Item 19) — impossible to validate ROI on $113k-$712k investment
  3. 03HIGHGoing Concern = False suggests financial instability or operational uncertainty at franchisor level
  4. 04MINORNo protected territory creates direct competition risk and cannibalization between franchisees
  5. 05MINOR$1,200/month minimum royalty (vs. 6% of gross) penalizes low-revenue locations and indicates weak unit economics
  6. 06MINORWide investment range ($113k-$712k spread of 530%) suggests inconsistent buildout costs or undefined unit models
  7. 07MINOR5-year term is relatively short; limits ability to recoup investment or build equity
  8. 08HIGHNo disclosed litigation history suspicious given only 2 units (harder to have disputes with tiny system)

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.