FranchiseVerdict
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A41/100FDD 2025

PJ’s Coffee of New Orleans — Litigation & Risk

Food & Beverage - Coffee & Tea · 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
41 / 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
126
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
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
Louisiana
State whose law governs disputes — relevant if you're not based there

What drove the 41/100 rating

Risk Score Breakdown

  1. 01HIGHActive litigation involving bad faith termination claims (Whitetail 26) and food contamination personal injury lawsuit (Unique Marie Hankston) suggests operational/legal vulnerabilities
  2. 02MINORWide investment range ($262.5K–$1.7M) indicates inconsistent unit economics and unclear cost structure across locations
  3. 03MINORNet profit margin of 25.3% ($149K on $589K revenue) appears optimistic given 5% royalty, labor, rent, and COGS in QSR; claims lack third-party validation (no Item 19 financial statement)
  4. 04MINORModest unit growth of 8.3% YoY in competitive coffee market raises questions about expansion difficulty and franchisee recruitment challenges
  5. 05HIGHHigh franchise fee ($40K) combined with litigation history may deter qualified candidates, creating pressure to relax vetting standards

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.