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B59/100FDD 2025

Roberto’s Taco Shop — Litigation & Risk

Food & Beverage - Full Service · 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
59 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MINORNo revenue or net income disclosure (Item 19) — impossible to validate ROI claims or benchmark performance
  2. 02MINORStagnant unit growth (1.8% YoY) suggests market saturation or franchisee dissatisfaction in a mature QSR category
  3. 03MEDHigh royalty burden ($6,000–$18,000/month = $72,000–$216,000 annually) on undisclosed margins creates profitability risk
  4. 04MINORNo protected territory — direct competition from other Roberto's franchisees in same market
  5. 05MEDTotal investment range ($547,600–$891,100) is substantial for a taco shop with no disclosed profitability benchmarks
  6. 06HIGHGoing Concern = False (assuming this means no explicit going-concern clause or unclear franchisor stability)

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.