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B62/100FDD 2025

The Halal Guys — Litigation & Risk

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

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
62 / 100
FranchiseVerdict composite
Rating
MODERATE
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
21
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
$14.8M
Avg loan size
$703K
Participating lenders
14

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 62/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 9.1% YoY (85 units) indicating system contraction and potential franchisee struggles
  2. 02MEDNo Item 19 financial disclosure (avg revenue/net income not disclosed) prevents assessment of actual profit potential
  3. 03HIGHMultiple active/recent litigation including ongoing class-action FLSA wage violation lawsuit creating liability exposure
  4. 04MEDHigh initial investment range ($417K-$1.3M) combined with 6% royalty creates significant cost burden on undisclosed margins
  5. 05HIGHGoing Concern = False suggests franchisor may have reported going concern warnings in financial statements
  6. 06HIGHFraud/breach of contract claims in settled disputes indicate governance and franchisee relations issues
  7. 07HIGHDeclining unit count + litigation + no financial transparency = inability to validate 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.