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B65/100FDD 2025
The Breakfast Club at Midtown — 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
65 / 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
California
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — franchisor may be experiencing financial distress or operational instability
- 02MEDNet Income not disclosed — inability to assess actual profitability; average revenue of $3.8M may not translate to acceptable franchisee margins after 5% royalty, CoGS, and labor
- 03MINOROnly 5 units with unknown growth trajectory — extremely small system with no visibility into expansion plans or unit growth rate
- 04MEDHigh investment range ($611K-$945K) relative to system size — limited economies of scale and unclear unit economics
- 05MINORNo Item 19 financial performance representations — franchisor not willing to substantiate earnings claims, making ROI projections unverifiable
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.