A34/100FDD 2024
Qdoba Mexican Eats — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
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
34 / 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
31
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
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 34/100 rating
Risk Score Breakdown
- 01HIGHActive litigation with Fiesta Ventures regarding franchise termination suggests systemic disputes over franchisor enforcement or performance
- 02MINORPrior $600,000 settlement with Q of Hasbrouck Heights plus royalty reduction indicates franchisor willingness to modify terms mid-agreement, creating precedent uncertainty
- 03HIGHGoing Concern status = False suggests potential balance sheet weakness or undisclosed financial stress at corporate level despite system-wide $1.25B+ revenue
- 04MINORModest unit growth of 7.4% YoY is below QSR category average, indicating maturation or contraction risk in competitive fast-casual segment
- 05MINORHigh investment range ($545K-$1.29M) against 31% net margin creates 1.3-3.2 year payback dependency on traffic consistency and labor cost stability
- 06MINORNo Item 19 (Avg Revenue disclosure) provided to franchisees — the $1.625M average may not reflect franchisee-specific location performance or seasonality
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.