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D75/100FDD 2025

ShippingShop — Litigation & Risk

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

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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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
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
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status indicates material uncertainty about franchisor's ability to continue operations
  2. 02MINOROnly 1 unit in system with unknown growth trajectory suggests failed or stalled expansion
  3. 03MINORNo Item 19 (average revenue/income disclosure) provided — cannot assess unit economics or ROI potential
  4. 04MEDHigh initial investment ($99.5K–$209K) paired with undisclosed earnings creates severe risk asymmetry
  5. 05MINOR5% royalty on gross sales with no profitability data means franchisee bears revenue risk without visibility into actual net returns
  6. 06MEDExtremely limited franchisee base (1 unit) prevents meaningful validation and suggests pilot-stage or failed system

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.