FranchiseVerdict
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D68/100FDD 2025

South Philly Steaks & Fries / South Philly Cheesesteaks & Fries — Litigation & Risk

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

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Elevated Risk

9 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
9
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
68 / 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
2
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
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 68/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates financial instability or viability questions at franchisor level
  2. 02MINOROnly 6 units system-wide with unknown growth trajectory suggests stagnant or declining franchise system
  3. 03HIGHMultiple litigation cases including trademark infringement, unpaid royalties, and lease disputes indicate operational and legal mismanagement
  4. 04MEDNet income not disclosed — unable to assess actual profitability despite $1.2M average revenue claim
  5. 05MINORNo territory protection leaves franchisees vulnerable to cannibalization by franchisor or other franchisees
  6. 06MINORJudgments against former affiliates for rental defaults suggest franchisor may lack oversight and support capability
  7. 07MINOR5% royalty on claimed $1.2M revenue = $60K annually, but without net income data, true ROI on $321K-$607K investment is unverifiable

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.