D72/100FDD 2023
Oath Pizza — Litigation & Risk
Food & Beverage - Pizza · 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
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
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$345K
Avg loan size
$345K
Participating lenders
1
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
- 01MINORUnit count collapsed 47.7% year-over-year (30 units remaining) indicating severe system contraction and franchisee failures
- 02HIGHGoing Concern status is FALSE, suggesting auditor doubts about franchisor's financial viability and ability to support franchise system
- 03MEDNet income not disclosed despite $893k average unit revenue, preventing ROI analysis and raising profitability concerns
- 04MINORHigh initial investment ($380k-$550k) paired with 5.5% royalty creates significant capital risk with unclear payback timeline
- 05MEDDramatic unit decline suggests widespread franchisee dissatisfaction, operational challenges, or market rejection
- 06MINORMinimal franchise fee ($30k) may indicate franchisor financial stress or inability to attract quality franchisees
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.