D75/100FDD 2025
Ug — 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
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status indicates material uncertainty about franchisor's ability to continue operations
- 02HIGHZero disclosed franchise units with unknown growth trajectory suggests brand may be pre-revenue, collapsing, or fraudulent
- 03MINORNo average revenue or net income disclosure (Item 19) prevents ROI validation and suggests poor franchisee performance
- 04MEDHigh investment range ($283.5K–$679.2K) combined with undisclosed earnings creates severe financial risk exposure
- 05HIGH5-year term is relatively short; combined with going concern status raises renewal and long-term viability concerns
- 06MINORUnknown unit count indicates lack of transparency; franchisor may be hiding franchisee failures or system collapse
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.