FranchiseVerdict
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D75/100FDD 2025

stayfull — 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
Illinois
State whose law governs disputes — relevant if you're not based there

What drove the 75/100 rating

Risk Score Breakdown

  1. 01MINOROnly 2 franchised units with unknown/likely stagnant growth trajectory raises severe scalability concerns
  2. 02HIGHGoing Concern status is FALSE — indicates potential financial distress or structural viability issues at corporate level
  3. 03MEDNo Item 19 financial performance disclosures (Avg Revenue and Net Income not disclosed) prevents ROI validation and suggests poor unit economics
  4. 04MINORRoyalty structure based on Gross Profit (not Gross Revenue) is unusual and creates accounting ambiguity and potential disputes
  5. 05MEDHigh initial investment ($122k-$226k) with only 2 operating units and no disclosed profitability creates severe risk-return mismatch

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.