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A45/100FDD 2025

Paris Baguette — Litigation & Risk

Food & Beverage - Bakery · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
45 / 100
FranchiseVerdict composite
Rating
STRONG
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
103
Government-backed loans issued
Default rate
5.6%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$114.0M
Avg loan size
$1.1M
Participating lenders
46

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

What drove the 45/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Unit Volume) disclosed despite $2.86M average revenue claim — inability to verify actual franchisee profitability
  2. 02MINORRecent labor violation charges against Chairman (April 2024) suggest potential systemic HR/compliance issues that could affect franchise operations
  3. 03MINORAggressive unit growth (35.8% YoY) with 197 units may indicate over-saturation risk or quality control concerns in rapid expansion
  4. 04MEDHigh initial investment range ($727K-$1.83M) combined with 5% royalty creates significant break-even pressure without disclosed net income
  5. 05HIGHGoing Concern flag is FALSE but litigation history (FTC order 2020, labor charges 2024) indicates governance/compliance weaknesses despite Supreme Court reversal

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.