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D72/100FDD 2025

Teapulse — Litigation & Risk

Food & Beverage - Quick 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
72 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINOROnly 3 units in entire system with unknown/likely stagnant growth trajectory indicates minimal market validation
  2. 02HIGHGoing Concern status is FALSE — suggesting financial instability or operational distress at corporate level
  3. 03MEDNo Item 19 financial performance data (avg revenue/net income) disclosed — impossible to assess ROI or break-even timeline
  4. 04MINORHigh investment range ($259k–$860k) combined with 5% royalty is aggressive for unproven brand with 3-unit footprint
  5. 05MINORFranchise fee of $29,800 + initial investment ratio suggests franchisor heavily dependent on franchise sales rather than unit profitability
  6. 06MINOR10-year term is lengthy commitment to brand with no demonstrated unit economics or growth momentum

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.