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B64/100FDD 2026

Sauce Pizza / Wine — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

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Elevated Risk

18 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
18
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
64 / 100
FranchiseVerdict composite
Rating
MODERATE
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
169
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
State where Franchised Business is located
State whose law governs disputes — relevant if you're not based there

What drove the 64/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern False status indicates potential financial viability issues at franchisor level
  2. 02HIGHSignificant litigation history involving breach of contract, misrepresentation, and trademark infringement suggests operational and legal instability
  3. 03MINOROnly 13 units with unknown growth trajectory suggests stagnant or declining system (typical growth franchises have 50+ units)
  4. 04MEDWide investment range ($1.3M–$5.5M) with no disclosed average net income makes ROI projections impossible
  5. 05MINORUnprotected territory creates direct competition risk from other franchisees within same geographic areas
  6. 06MINORHigh initial investment relative to small unit count and unknown profitability creates significant downside exposure
  7. 07MINOR5% royalty plus $10/week surcharge on $1.9M average revenue yields ~$100K+ annual franchisor revenue per unit, yet system is not growing

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.