FranchiseVerdict
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D71/100FDD 2023

Shakey’s Pizza Parlor — Litigation & Risk

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

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
71 / 100
FranchiseVerdict composite
Rating
CAUTION
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
10
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
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
3 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
California
State whose law governs disputes — relevant if you're not based there

What drove the 71/100 rating

Risk Score Breakdown

  1. 01MINORNegative unit growth (-4.0% YoY) indicates declining system health and potential saturation or franchisee failure
  2. 02MINORFour concluded lawsuits including wage/hour violations and harassment allegations suggest systemic labor compliance and workplace culture issues
  3. 03MEDNo Item 19 financial disclosure (revenue and net income not disclosed) prevents validation of franchise economics and profitability claims
  4. 04MEDHigh investment range ($624K–$2.2M) combined with undisclosed returns creates significant capital-at-risk with no transparent ROI benchmarks
  5. 05MINORShrinking unit base (48 locations) reduces brand presence, purchasing power, and marketing leverage for franchisees
  6. 06MEDFive percent royalty on undisclosed gross sales means franchisees cannot assess true profit margins or breakeven requirements

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.