BAbove average58/100FDD 2025
Paciugo Gelato Caffè: Litigation & Risk
Quick-Service Restaurants · FDD Items 3, 4 & 5
Elevated Risk
No litigation cases disclosed in FDD Items 3 and 4. Bankruptcy disclosed in Item 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)
- Disclosed
- Franchisor or officer bankruptcy
- Verdict score
- 58 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 9
- Government-backed loans issued
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- N/A
- Loans charged off or defaulted
- Total loan volume
- $2.1M
- Avg loan size
- $237K
- Participating lenders
- 6
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
- 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
No litigation disclosed in Item 3
What drove the 58/100 verdict
Risk Score Breakdown
- 01MEDUnit count declined 4.3% year-over-year (22 units is very small system indicating contraction risk)
- 02MINORNo average revenue or net income disclosure (Item 19) prevents ROI assessment and suggests weak performance or franchisor unwilling to disclose
- 03MINORWide investment range ($109,700–$612,250) indicates inconsistent unit economics or hidden costs
- 04MINORUnprotected territory creates direct competition risk from other franchisees and company-owned locations
- 05HIGHGoing Concern status is FALSE, creating uncertainty about franchisor financial stability and support
- 06MEDRelatively high 6% royalty on undisclosed revenue base makes profitability math impossible to validate
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.