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A51/100FDD 2026

Toastique — 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
51 / 100
FranchiseVerdict composite
Rating
STRONG
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
43
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$15.5M
Avg loan size
$360K
Participating lenders
9

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

What drove the 51/100 rating

Risk Score Breakdown

  1. 01HIGHActive litigation and arbitration with former franchisee alleging fraud and deceptive trade practices creates legal and reputational risk
  2. 02HIGHGoing concern status is FALSE, indicating potential financial instability at corporate level despite positive unit-level economics
  3. 03MINORRapid unit growth (63.3% YoY) may indicate aggressive recruitment masking underlying franchisee satisfaction or retention issues
  4. 04MINORHigh initial investment ($471k-$891k) combined with 6% royalty creates significant break-even threshold requiring sustained $862k+ annual revenue
  5. 05MINORItem 19 financial performance data absent (no Item 19 disclosure), limiting ability to verify claimed $172k average net income across system
  6. 06HIGHSingle litigation case represents meaningful percentage of small 57-unit system, suggesting potential operator/franchisor relationship problems

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.