D75/100FDD 2025
The Toasted Yolk Cafe — Litigation & Risk
Food & Beverage - Full Service · 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
32
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
100.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$27.0M
Avg loan size
$845K
Participating lenders
19
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01MINORNo Net Income disclosure (Item 19) prevents accurate ROI assessment despite $2.16M average revenue
- 02HIGHGoing Concern status is False, indicating potential financial instability or franchisor operational issues
- 03MINORHigh initial investment range ($1.06M–$1.72M) with 5% royalty creates significant break-even pressure
- 04MINORRapid unit growth of 24.1% YoY raises questions about franchisee quality, support scaling, and sustainability
- 05MEDMissing critical profitability data makes it impossible to validate whether $2.16M revenue translates to viable unit economics
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.