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D72/100FDD 2025

Sunrise Shack — Litigation & Risk

Food & Beverage - Coffee & Tea · 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
72 / 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
1 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
Hawaii
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential financial instability or solvency issues at corporate level
  2. 02MEDOnly 6 units system-wide suggests minimal scale, limited support infrastructure, and extremely high failure risk
  3. 03MINORNo Average Revenue or Net Income disclosure (Item 19) prevents ROI validation — cannot assess if $235K-$605K investment is recoverable
  4. 04MINORWide investment range ($369,300 spread) with no revenue benchmarks creates inability to model unit economics
  5. 05MINORUnknown growth trajectory with only 6 units raises questions about system viability and franchisee recruitment sustainability
  6. 06MEDHigh royalty rate (6%) on undisclosed revenue base means franchisees cannot predict actual profitability impact

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.