Elevated Risk
46 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
46
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
79 / 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
2
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
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
Ohio
State whose law governs disputes — relevant if you're not based there
What drove the 79/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status indicates potential insolvency despite 63.6% unit growth (suggests acquisition/restructuring, not organic health)
- 02HIGHMassive litigation exposure: Deepwater Horizon (hundreds of lawsuits), UST environmental liability, MTBE contamination, antitrust/price manipulation, and False Claims Act settlement create ongoing financial and reputational risk
- 03MINORNo Average Revenue or Net Income disclosure in FDD prevents validation of $12.4M investment viability or ROI projections
- 04MINORComplex tiered royalty structure (4.5%/2% on QSR + per-gallon fuel fees) creates revenue leakage; fuel margins are notoriously thin in this sector
- 05HIGHHigh unit growth (63.6% YoY) during going concern status suggests distressed franchisee recruitment rather than system strength
- 06MINOREnvironmental liability exposure (USTs, MTBE) creates potential franchisee indemnification risk if parent company defaults
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.