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B62/100FDD 2025

Pinkberry — Litigation & Risk

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

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Elevated Risk

21 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
21
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
62 / 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
20
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
Total loan volume
$7.4M
Avg loan size
$371K
Participating lenders
13

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

What drove the 62/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 6.3% YoY (59 units) indicating system contraction and potential market saturation or operational challenges
  2. 02HIGHHistory of litigation involving breach of contract, misrepresentation, and franchise law violations suggests franchisor-franchisee relationship issues and legal risk exposure
  3. 03MINORNo average net income disclosure despite $648K average revenue — inability or unwillingness to show profitability is a major red flag
  4. 04MINORUnprotected territory creates direct competition risk; franchisor can place additional units nearby, cannibalizing sales
  5. 05MINORHigh initial investment ($285K-$663K) combined with declining unit economics and 6% royalty burden in contracting system
  6. 06HIGHFranchisor litigation history including lawsuits filed against franchisees suggests enforcement-heavy approach and potential relationship deterioration

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.