FranchiseVerdict
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D70/100FDD 2025

The Pretzel Twister — Litigation & Risk

Food & Beverage - Bakery · 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
70 / 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
11
Government-backed loans issued
Default rate
18.2%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$1.7M
Avg loan size
$156K
Participating lenders
8

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
North Carolina
State whose law governs disputes — relevant if you're not based there

What drove the 70/100 rating

Risk Score Breakdown

  1. 01MINORNegative unit growth: -4.5% YoY indicates system contraction and potential market saturation or operational challenges
  2. 02MINORNo financial disclosure: Franchisor refuses to provide Item 19 (average revenue/net income), making ROI analysis impossible
  3. 03HIGHGoing Concern status is False: Suggests franchisor may have disclosed financial instability or operational concerns to the FTC
  4. 04MINORHigh investment-to-fee ratio: $121.7K–$338.8K investment for a $25K fee indicates thin margins and slow payback periods
  5. 05MEDSmall system size: Only 21 units makes the franchise vulnerable to failure; limited data on unit economics and franchisee success
  6. 06MINOR6% royalty burden: On top of operational costs for a lower-margin food business (pretzel shops typically run 15-30% net margins)

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.