FranchiseVerdict
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B65/100FDD 2025

Red Robin — Litigation & Risk

Food & Beverage - Full Service · 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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
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
1
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$518K
Avg loan size
$518K
Participating lenders
1

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

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-1.1% YoY) indicates system contraction and potential market saturation or performance issues
  2. 02MINORNo Item 19 financial performance disclosure (Avg Revenue and Net Income not provided) prevents informed ROI analysis on $2.7M-$5.8M investment
  3. 03MINORHigh initial investment range ($2.7M-$5.8M) combined with 5% royalty creates significant financial burden without transparent profitability benchmarks
  4. 04HIGHPrior litigation (2016 trademark/franchise agreement disputes with LVRG) suggests franchise agreement enforcement challenges and franchisor-franchisee relationship risks
  5. 05MINORCasual dining segment experiencing structural headwinds; declining unit count may reflect category-wide weakness rather than brand-specific strength

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.