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A45/100FDD 2026

ProSource Wholesale — Litigation & Risk

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

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
45 / 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
8
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$5.1M
Avg loan size
$636K
Participating lenders
8

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
1 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
Missouri
State whose law governs disputes — relevant if you're not based there

What drove the 45/100 rating

Risk Score Breakdown

  1. 01MINORStagnant unit growth at 1.4% YoY indicates mature/declining system with minimal expansion momentum
  2. 02MEDNet income not disclosed in Item 19 prevents ROI validation; only gross revenue provided ($612k avg) creates opacity on actual profitability
  3. 03HIGH2003 Maryland securities litigation (Consent Order) suggests historical compliance issues with franchise disclosure laws
  4. 04MINORHigh initial investment ($955k-$979k) combined with $2,000 minimum monthly royalty ($24k/year floor) creates elevated break-even threshold
  5. 05MINORMinimum royalty obligation ($24k annually) represents 3.9% of average unit revenue even if sales fluctuate, creating cash flow risk

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.