Elevated Risk
8 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 100
FranchiseVerdict composite
Rating
MODERATE
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 66/100 rating
Risk Score Breakdown
- 01MINORMultiple regulatory violations across three states (Washington, Maryland, California) indicate systemic compliance failures by franchisor
- 02MINORNo average revenue or net income disclosure (Item 19) prevents financial viability assessment and suggests poor performance data
- 03MINORRoyalty range of 5-25% is extremely wide with no transparency on how rates are determined or applied
- 04MINOR1-year term with unprotected territory creates instability; franchisees can be non-renewed annually with no territorial defense
- 05HIGHGoing Concern designation is FALSE, indicating financial distress at corporate level and potential inability to support franchisees
- 06MINOR327 units with unknown growth trajectory suggests stagnant or declining system; no disclosure of unit openings/closures
- 07MINORHigh franchise fee ($50,000) paired with high royalties (up to 25%) and unproven returns creates unfavorable cost structure
- 08HIGHGBC Food Services litigation involvement suggests affiliated entity liability and potential shared operational control issues
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.