FranchiseVerdict
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B57/100FDD 2025

Onigilly Japanese Kitchen — Litigation & Risk

Food & Beverage - Quick Service · 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
57 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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 57/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status indicates financial distress at franchisor level despite positive unit economics
  2. 02MEDOnly 5 units with unknown growth trajectory suggests stalled expansion and limited proof of scalability
  3. 03MINORWide investment range ($265K-$832K) indicates inconsistent unit economics or unclear cost breakdowns
  4. 04MEDNo Item 19 (financial performance representations) disclosed — unable to validate stated average revenue/net income claims
  5. 05MINOR6% royalty on $1.65M average revenue = $99K annual royalty plus 6% on food costs represents significant margin pressure
  6. 06MEDModest net income ($258.5K) on $1.65M revenue = only 15.7% net margin, leaving limited buffer for underperformance

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.