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B67/100FDD 2023

TaKorean — Litigation & Risk

Food & Beverage - Full 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
67 / 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
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
District of Columbia
State whose law governs disputes — relevant if you're not based there

What drove the 67/100 rating

Risk Score Breakdown

  1. 01MEDOnly 2 units in system with unknown growth trajectory indicates extremely limited operating history and validation data
  2. 02MINORMassive investment range ($337K-$781.5K) with no clear explanation for 131% variance suggests inconsistent unit economics or hidden costs
  3. 03MINORAverage net income of $120,457 on $1.31M revenue (9.2% net margin) is below industry standards for QSR; unclear if this is pre- or post-royalty
  4. 04MINORAbsence of Item 19 financial performance representation limits ability to validate franchisee profitability claims
  5. 05MINORTwo-unit system lacks statistical significance to project franchise success or identify operational best practices

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.