FranchiseVerdict
Pizza Inn logo
D74/100FDD 2024

Pizza Inn — Litigation & Risk

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

Back to overview

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
74 / 100
FranchiseVerdict composite
Rating
CAUTION
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
73
Government-backed loans issued
Default rate
24.3%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
17 loans
Loans charged off or defaulted
Total loan volume
$24.3M
Avg loan size
$333K
Participating lenders
44

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

What drove the 74/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 14.4% year-over-year indicates system contraction and potential franchisee dissatisfaction
  2. 02HIGHGoing Concern flag = FALSE suggests financial viability questions at franchisor level
  3. 03MINORNet income margin of only 0.79% (11.2K on 1.43M revenue) is dangerously thin for pizza QSR and leaves no buffer for downturns
  4. 04MINORWide investment range ($11K-$1.45M) suggests inconsistent unit economics or undefined cost structure
  5. 05MINORNo Item 19 financial performance representations limits ability to validate franchisor claims about profitability
  6. 06MED20-year term is unusually long and locks franchisee into declining system with limited exit flexibility

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.