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A51/100FDD 2024

Smoothie Factory+ Kitchen — Litigation & Risk

Food & Beverage - Juice & Smoothies · FDD Items 3, 4 & 5

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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
51 / 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
45
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
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 51/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 17.6% year-over-year (15 units), indicating system contraction and franchisee attrition
  2. 02MINORNo Item 19 financial disclosure (average revenue/net income not provided), making ROI analysis impossible
  3. 03HIGHActive litigation history with franchisor suing franchisee for unpaid royalties suggests cash flow problems among franchisees
  4. 04MEDHigh investment range ($121,750-$548,000) combined with undisclosed profitability creates significant blind spot
  5. 05HIGHGoing Concern status raises questions about franchisor financial stability and long-term support
  6. 06MED5% royalty on undisclosed revenue creates uncertainty; profitability unclear at various volume levels

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.