A41/100FDD 2025
Russo’s New York Pizzeria — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
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
41 / 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
21
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 41/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 3.4% YoY (36 units) indicating system contraction and potential market saturation or franchisee satisfaction issues
- 02MINORNo Item 19 (net income disclosure) provided despite average revenue of $882k — inability or unwillingness to disclose profitability is a major transparency concern
- 03MINORRegulatory penalty from California DFPI for unregistered marketing activity suggests compliance weaknesses at corporate level
- 04HIGHFranchisor litigation against former franchisee indicates potential disputes over arbitration enforcement and possible franchisee relationship deterioration
- 05MEDHigh investment range ($439k-$1.5M) combined with 6% royalty creates significant breakeven hurdle without disclosed net income benchmarks
- 06MINORSmall unit base (36 locations) limits brand recognition, marketing scale, and supply chain leverage compared to larger franchises
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.