Robeks: Litigation & Risk
Quick-Service Restaurants · FDD Items 3, 4 & 5
Moderate: Review
1 case disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 98 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 24
- Government-backed loans issued
- Charge-off rate
- 0.0%
- vs 16% franchise average
- 5-yr charge-off rate
- 0.0%
- Defaults
- 0 loans
- Loans charged off or defaulted
- Total loan volume
- $6.7M
- Avg loan size
- $279K
- Participating lenders
- 13
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
- California
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
DRNK Coffee + Tea, LLC and Mostafa Narimanzadeh v. Mitchell Baker, Robeks Corporation, and Robeks Franchise Corp. (Case No. 21STCV21980, Los Angeles Superior Court). Plaintiffs asserted claims for intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, intentional interference with contractual relations, unfair competition, defamation per se, trade libel, conversion, invasion of privacy, and violation of California Invasion of Privacy Act. Claims alleged interference with DRNK franchise lease location efforts and interference with DRNK franchisee relationship. Robeks Defendants' demurer granted on some claims, overruled on others. Matter resolved via settlement agreement executed April 10, 2024, with Robeks Defendants paying $50,000 and case dismissed with prejudice. Mutual releases of liability included.
What drove the 98/100 verdict
Risk Score Breakdown
- 01MINOROne concluded lawsuit (settled April 2024)
- 02MINORNet worth $5.87M, net income $410,837
- 03MED106 units, low turnover 4.85%, Item 19 disclosed
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.