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F82/100FDD 2025

Orange Leaf — Litigation & Risk

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

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
82 / 100
FranchiseVerdict composite
Rating
AVOID
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
37
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
9 loans
Loans charged off or defaulted
Total loan volume
$9.3M
Avg loan size
$250K
Participating lenders
20

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

What drove the 82/100 rating

Risk Score Breakdown

  1. 01HIGHFounder/key executive (Sherif Mityas) has SEC securities fraud judgment from 2010 with permanent injunction — indicates financial misrepresentation risk
  2. 02HIGHGoing Concern status is FALSE — suggests parent company or franchisor has material doubt about ability to continue operations
  3. 03MEDNo average revenue or net income disclosed in FDD — inability/unwillingness to provide Item 19 financial performance representation is major red flag
  4. 04MEDOnly 61 units with unknown growth trajectory — small and potentially contracting system with no disclosed unit growth data
  5. 05MEDHigh total investment ($349k-$521.5k) combined with 5% royalty on undisclosed revenue creates cash flow uncertainty
  6. 06MINOR10-year term locks franchisee into relationship with franchisor of questionable financial stability

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.