B59/100FDD 2025
Sauce on the Side — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
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
Missouri
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — franchisor may have financial/operational viability issues
- 02MINORNet profit margin is extremely thin at 6.9% ($67,773 on $985,353 revenue) — leaves little buffer for underperformance or unexpected costs
- 03MEDOnly 12 units with 20% YoY growth is modest scale — limited brand recognition and support infrastructure
- 04MINORHigh initial investment ($494K-$793.5K) relative to average net income creates long payback period (7-12+ years)
- 05HIGHNo litigation disclosed but Going Concern flag suggests undisclosed operational or financial stress
- 06MINOR5% royalty on gross sales (not net) compounds margin pressure in low-profit business model
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.