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D71/100FDD 2025

The Counter Custom Burgers — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

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Elevated Risk

20 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
20
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
71 / 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
8
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
Total loan volume
$7.8M
Avg loan size
$980K
Participating lenders
6

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 71/100 rating

Risk Score Breakdown

  1. 01MINORSystem collapsed 38.5% YoY (11 units remaining) — severe unit attrition signals fundamental business model or support failure
  2. 02HIGHGoing Concern = False indicates franchisor financial distress and potential inability to support franchisees
  3. 03HIGHMultiple litigation claims including breach of contract and misrepresentation by former franchisees suggest systemic disputes
  4. 04MEDNet Income not disclosed — unable to assess actual profitability; combined with declining units suggests franchisees are struggling
  5. 05MINORFranchise registration and disclosure violations by predecessors/affiliates indicates compliance and governance issues
  6. 06MINOR6% royalty on $2.73M avg revenue = ~$163,800 annual royalty burden on top of $711K-$1.98M initial investment
  7. 07MINOR11 remaining units insufficient to validate unit economics or franchise model sustainability

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.