FranchiseVerdict
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B57/100FDD 2025

The Original Pancake House — Litigation & Risk

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

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
57 / 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
$12.6M
Avg loan size
$598K
Participating lenders
10

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
1 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
Oregon
State whose law governs disputes — relevant if you're not based there

What drove the 57/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-0.7% YoY) indicates system contraction despite 147 locations
  2. 02HIGHActive litigation over royalty collection and enforcement suggests franchisor-franchisee disputes and payment compliance issues
  3. 03MEDNo Item 19 financial performance disclosure (Avg Revenue and Net Income not disclosed) prevents prospective franchisees from validating ROI on $482.5K-$1.66M investment
  4. 04MINORHigh initial investment range ($482.5K-$1.66M) combined with 2% royalty creates significant capital requirement with unclear profit potential
  5. 05MINOR20-year term is longer than industry standard (typically 10 years) and limits franchisee exit flexibility
  6. 06HIGHGoing Concern flag is false but system contraction and litigation suggest operational stress

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.