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B65/100FDD 2025

NrGize Lifestyle Cafe — Litigation & Risk

Food & Beverage - Quick Service · FDD Items 3, 4 & 5

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Elevated Risk

21 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
21
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
65 / 100
FranchiseVerdict composite
Rating
MODERATE
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
5
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$332K
Avg loan size
$66K
Participating lenders
4

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

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 (Average Unit Volume) disclosure—inability to assess unit economics or profitability claims
  2. 02HIGHMultiple litigation matters involving breach of contract and misrepresentation allegations against franchisor
  3. 03MINORUnprotected territory creates direct competition risk from other NrGize franchisees and company-owned units
  4. 04MINORRoyalty structure ($150/week minimum) represents fixed overhead even during slow revenue periods
  5. 05MEDOnly 57 total units with unknown growth trajectory suggests limited brand recognition and system maturity
  6. 06MINORWide investment range ($89K–$454K) indicates inconsistent unit models or unclear cost structure
  7. 07MINORTwo active franchisor lawsuits against franchisees signal potential disputes over performance standards or contract terms

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.