BAbove average58/100FDD 2024
On The Border Mexican Grill & Cantina: Litigation & Risk
Full-Service Restaurants · 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)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 58 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
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
- Not waived
- 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
- TX
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
0 case reference(s): 0 pending, 0 settled.
What drove the 58/100 verdict
Risk Score Breakdown
- 01MEDNet income not disclosed in Item 19 — inability to validate actual profitability despite $2.3M average revenue
- 02MINORHigh initial investment ($2.9M–$5.1M) with modest 4% royalty creates pressure to hit $2.3M revenue baseline to break even
- 03MINORSlow unit growth (8.7% YoY) suggests market saturation or franchisee satisfaction concerns in mature 134-unit system
- 04MED20-year term locks franchisees into long commitment with no disclosed performance benchmarks or exit clauses
- 05MINORCasual dining segment structurally challenged post-2020 with labor cost inflation and consumer traffic volatility
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.