FranchiseVerdict
Surf City Squeeze logo
D75/100FDD 2025

Surf City Squeeze — Litigation & Risk

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

Back to overview

Elevated Risk

15 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
15
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

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
25
Government-backed loans issued
Default rate
12.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
3 loans
Loans charged off or defaulted
Total loan volume
$2.5M
Avg loan size
$101K
Participating lenders
11

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

What drove the 75/100 rating

Risk Score Breakdown

  1. 01MINORUnit count declining 3.1% YoY (63 units) suggests system contraction and weakening franchisee performance
  2. 02MINORNo Item 19 (average revenue/net income) disclosure prevents validation of unit economics and ROI claims
  3. 03HIGHExtensive litigation history across franchisor's portfolio including 2024 breach of contract lawsuits against franchisees signals franchisor-franchisee relationship deterioration
  4. 04MINORUnprotected territory creates direct competition risk within same market; aggressive royalty floor ($300/week minimum) may not align with declining unit health
  5. 05MEDHigh investment ceiling ($390k) relative to undisclosed profitability creates significant downside exposure with no transparent exit data

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.