Togo's: Litigation & Risk
Full-Service Restaurants · FDD Items 3, 4 & 5
Moderate: Review
2 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 2
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 56 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 23
- Government-backed loans issued
- Charge-off rate
- 17.4%
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 4 loans
- Loans charged off or defaulted
- Total loan volume
- $6.4M
- Avg loan size
- $277K
- Participating lenders
- 11
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
- California
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Two matters disclosed: (1) State of California v. TOGO'S Eateries, LLC - concluded August 8, 2017 regarding loyalty program point calculation rounding; TOGO'S paid $45,000 in penalties and costs, notified customers, and offered refunds/additional points. (2) Cohen entities and affiliated franchisees v. TOGO'S Eateries, LLC - arbitration filed November 10, 2020 alleging breach of contract, breach of good faith, fraud, and unfair competition related to sales and promotion fund management; settled January 2022 with TOGO'S paying $145,000 and agreeing to potential 5-year franchise extension at no cost.
What drove the 56/100 verdict
Risk Score Breakdown
- 01HIGH2 concluded, low-severity litigation matters
- 02MINORVery strong net worth $40.0M, net income $2.93M
- 03MEDAUV $715,086, Item 19 disclosed
- 04MINORMild -7.1% net growth
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.