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B65/100FDD 2025
Pepper Palace — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
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
65 / 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
Tennessee
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Average Unit Volume) disclosed — cannot validate $349k avg revenue claim or actual profitability
- 02HIGHGoing Concern = False indicates potential financial instability or uncertain future viability of franchisor
- 03MEDOnly 81 units system-wide suggests limited scale, unproven model, and higher failure risk vs. established chains
- 04MEDNet income not disclosed — franchisees cannot assess true earning potential after 6% royalties + operating costs
- 05MINORUnit growth trajectory unknown — cannot determine if system is expanding, stagnant, or contracting
- 06MEDHigh initial investment ($211k-$288k) relative to small system size and undisclosed profitability
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.