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D72/100FDD 2024

The Empanada Maker — 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
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
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
Delaware
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINOROnly 2 units in system with unknown/stagnant growth trajectory suggests minimal market validation and scalability concerns
  2. 02MINORNo Item 19 (Average Revenue/Net Income) disclosure means no transparency on actual franchisee profitability—critical red flag for $246k-$554k investment
  3. 03HIGHGoing Concern status is FALSE, indicating potential financial instability at franchisor level and risk of system collapse
  4. 04MEDWide investment range spread ($308k delta) with no disclosed average revenues makes ROI projection impossible and suggests inconsistent unit economics
  5. 05MINOROnly 2 operating units provide no meaningful sample size to validate the business model's viability or franchisee success rates
  6. 06MINORMicro-franchise system with minimal brand recognition limits economies of scale, supply chain leverage, and marketing ROI

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.