D75/100FDD 2025
The Outside Scoop — Litigation & Risk
Food & Beverage - Ice Cream & Desserts · 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
75 / 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
1
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
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
Iowa
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern Status: FALSE indicates the franchisor itself may be financially unstable or facing viability questions
- 02MEDZero Disclosed Units: No current franchise locations means no operating system to validate, no peer network, and unproven concept in franchise model
- 03MINORNo Financial Disclosure (Item 19): Absence of average revenue and net income data prevents ROI assessment and suggests franchisor cannot or will not substantiate earnings claims
- 04MINORExtreme Investment Range ($222K–$2.2M): 10x variance indicates undefined business model, poor cost controls, or vastly different unit types with no clarity on what drives variance
- 05MEDRoyalty Structure Sustainability Risk: 4% of gross (not net) revenues means franchisees pay even during losses; with no disclosed profitability data, this could be unsustainable
- 06MINORNo Operating History in Franchise Model: Starting from zero units means no proven Unit Economics, no case studies, and franchisees are beta testers
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.