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B62/100FDD 2025

TP TEA Shop — Litigation & Risk

Food & Beverage - Coffee & Tea · 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
62 / 100
FranchiseVerdict composite
Rating
MODERATE
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 62/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 disclosure: Average revenue and net income not provided, making ROI projections impossible to validate
  2. 02HIGHGoing Concern status is FALSE: Parent company may have financial stability issues or operational concerns
  3. 03MEDSmall system size with only 10 units: Limited scale, data sample, and support infrastructure; high unit growth (75% YoY) suggests very recent expansion with unproven model
  4. 04MEDHigh initial investment relative to undisclosed earnings: $393K-$697K investment with no earnings data creates blind ROI analysis
  5. 05MEDLimited franchise history: Only 10 units suggests nascent franchise system with minimal track record for franchisees to evaluate
  6. 06MINOR5.3% royalty rate is competitive, but high upfront costs ($49K fee) strain early profitability

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.