A38/100FDD 2025
Scooter’s Coffee — Litigation & Risk
Food & Beverage - Coffee & Tea · FDD Items 3, 4 & 5
Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
38 / 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
560
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
Nebraska
State whose law governs disputes — relevant if you're not based there
What drove the 38/100 rating
Risk Score Breakdown
- 01HIGHNo Item 19 financial performance representation (Going Concern: False) — cannot validate if average revenue/income figures are typical or outliers
- 02MINORUnprotected territory creates direct competition risk; with 849 units growing 13.2% YoY, market saturation concerns exist
- 03HIGHActive litigation (AAA arbitration, April 2026 hearing) involving franchisor suing franchisee for unpaid royalties signals potential compliance/collection disputes
- 04MINORHigh investment range ($692K–$1.52M) with modest average net income ($129K) yields 5–11 year payback period at best
- 05MINOR6% royalty on net sales structure may mask declining unit profitability as system expands; no transparency on unit economics trending
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.