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B58/100FDD 2025

Papa Johns — Litigation & Risk

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

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
58 / 100
FranchiseVerdict composite
Rating
MODERATE
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
323
Government-backed loans issued
Default rate
18.1%
vs <3% typical · system-wide
5-yr default rate
7.4%
Defaults
42 loans
Loans charged off or defaulted
Total loan volume
$104.8M
Avg loan size
$325K
Participating lenders
121

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

What drove the 58/100 rating

Risk Score Breakdown

  1. 01MEDNet Income not disclosed in FDD Item 19 — unable to validate actual profitability claims against $1.16M average revenue
  2. 02MINORSlow unit growth of only 2.3% YoY indicates market saturation or franchisee underperformance in mature 3,291-unit system
  3. 03HIGHMultiple litigation settlements (equipment lease disputes, antitrust 'no-poach' violations, franchise termination breaches) suggest operational and contractual friction
  4. 04MINORWide investment range ($111K–$853K) creates uncertainty about true startup costs and capital requirements for different formats
  5. 05MED5% royalty on net sales is standard but combined with undisclosed profitability makes ROI calculation impossible

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.