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A45/100FDD 2025
Rita’s — Litigation & Risk
Food & Beverage - Quick Service · FDD Items 3, 4 & 5
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
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
245
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
Governing law
Pennsylvania
State whose law governs disputes — relevant if you're not based there
What drove the 45/100 rating
Risk Score Breakdown
- 01MEDNet income not disclosed in FDD Item 19 — unable to validate profitability claims against $365K average revenue
- 02MEDUnit growth only 3.3% YoY — suggests stagnant or mature system with limited expansion momentum
- 03HIGHThree separate litigation actions disclosed (TCPA, development fee dispute, multi-franchisee California action) — indicates historical franchisor-franchisee conflict and disclosure concerns
- 04MINORHigh investment range ($315K–$905K) with 6.5% royalty creates significant break-even threshold; profitability unclear without Item 19 data
- 05MINORSeasonal frozen dessert business model carries revenue volatility risk not addressed in available metrics
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.