FranchiseVerdict
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A45/100FDD 2025

Randy’s Donuts — Litigation & Risk

Food & Beverage - Coffee & Tea · FDD Items 3, 4 & 5

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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
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
4
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

What drove the 45/100 rating

Risk Score Breakdown

  1. 01MINORNo net income disclosure in Item 19 — unable to validate actual profitability despite $1.27M average revenue
  2. 02HIGHGoing Concern status is FALSE — suggests financial instability or operational uncertainty at franchisor level
  3. 03MEDWide investment range ($240.5K–$788.5K) indicates inconsistent unit economics or hidden costs not transparently disclosed
  4. 04MED100% YoY unit growth (23 units) is suspicious — either brand is brand new, data is incomplete, or growth is unsustainable
  5. 05MINOR5% royalty on gross sales (not net) means franchisees pay royalties even during loss months

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.