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B55/100FDD 2025
Taco Bell Express — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
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
55 / 100
FranchiseVerdict composite
Rating
MODERATE
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
115
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
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
New York
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 2.2% YoY (238 units) indicates system contraction and potential market saturation or franchisee exit issues
- 02MEDNo average revenue or net income disclosed (Item 19) prevents accurate ROI analysis and suggests franchisor may be hiding underperformance
- 03MINORWide investment range ($287K-$855K) with no profitability benchmarks creates uncertainty about break-even timeline and capital requirements
- 04MINORUnprotected territory exposes franchisees to direct competition from other Taco Bell Express units and parent company cannibalization
- 05MINOR10% royalty on gross sales (not net) is aggressive and burdensome during low-revenue periods, compounding cash flow risk
- 06MEDSmall franchise fee ($22.5K) relative to total investment suggests limited franchisor skin-in-the-game and quality control resources
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.