FranchiseVerdict
Smoothie Factory / Smoothie Factory+Kitchen logo
B67/100FDD 2025

Smoothie Factory / Smoothie Factory+Kitchen — Litigation & Risk

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

Back to overview

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
67 / 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
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 67/100 rating

Risk Score Breakdown

  1. 01MINORUnit count collapsed 50% YoY (7 units remaining) indicating severe system contraction and franchisee failure rate
  2. 02HIGHThree active litigation cases involving breaches, unpaid royalties, and covenant violations suggest franchisor enforcement issues and franchisee disputes
  3. 03MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI validation and suggests poor unit economics or franchisor unwillingness to disclose
  4. 04HIGHGoing concern status indicates financial distress at corporate level, raising questions about support, marketing funds, and long-term viability
  5. 05MED6% royalty on undisclosed revenue with $278.5K-$475K investment creates opaque payback timeline and profitability uncertainty

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.