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D75/100FDD 2025

The Red Bird — 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
75 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 75/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status indicates franchisor financial distress or viability questions
  2. 02MEDOnly 3 units in system suggests minimal scale, limited support infrastructure, and unproven model
  3. 03MINORZero financial disclosure (revenue, net income, Item 19) prevents ROI validation and suggests poor performance
  4. 04MEDHigh initial investment range ($289.5K–$1.16M) with no disclosed average unit economics creates severe risk-reward imbalance
  5. 05MINORUnknown unit growth trajectory indicates system is either stagnant or contracting
  6. 06MED7% royalty on undisclosed revenue means franchisee profitability cannot be verified

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.