FranchiseVerdict
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D70/100FDD 2025

Premium Matcha Café Maiko — Litigation & Risk

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

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
1.5 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
Hawaii
State whose law governs disputes — relevant if you're not based there

What drove the 70/100 rating

Risk Score Breakdown

  1. 01MINORMultiple regulatory violations across three states (WA, VA, CA) for illegal franchise sales and disclosure failures between 2020-2023, indicating systemic compliance issues
  2. 02MINORZero financial transparency: no average unit volume, average net income, or Item 19 disclosure, making ROI impossible to validate
  3. 03HIGHAnemic growth rate of 8.7% YoY with only 26 units suggests market rejection or saturation in premium matcha category; units may be declining post-litigation
  4. 04MINORHigh initial investment ($333K-$471K) combined with mandatory $500/month minimum royalty creates cash flow pressure without proven unit economics
  5. 05MINORUnprotected territory creates direct competition risk; multiple franchisees can canibalize same market without contractual safeguards
  6. 06MINOR5-year term is shorter than industry standard (10 years typical), offering minimal amortization window for initial investment
  7. 07HIGH'Going Concern' status is FALSE, raising questions about franchisor financial stability and ability to support franchisees long-term

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.