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B64/100FDD 2025

TREND Transformations / GRANITE Transformations — Litigation & Risk

Food & Beverage - Quick Service · FDD Items 3, 4 & 5

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Elevated Risk

7 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
7
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
64 / 100
FranchiseVerdict composite
Rating
MODERATE
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
22
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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

What drove the 64/100 rating

Risk Score Breakdown

  1. 01MINORSystem declining 3.1% YoY with only 34 units suggests market saturation or operational challenges
  2. 02HIGHMultiple litigation cases against franchisees for trademark infringement and non-compete violations indicate enforcement disputes and potential legal exposure
  3. 03HIGHGoing concern status raises solvency questions about franchisor's ability to support franchisees long-term
  4. 04MEDNo disclosed average revenue or net income prevents ROI validation and suggests financial performance may not support $176k–$316k investment
  5. 05MINORUnprotected territory creates direct competition risk from other franchisees and company-owned locations
  6. 06MINORHigh upfront cost ($45k franchise fee + $176k–$316k total) with 5% ongoing royalty requires strong unit economics to justify
  7. 07MINORGlobal settlement over ownership and distributions indicates governance instability at franchisor level

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.