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D72/100FDD 2025

Village Inn — Litigation & Risk

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

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Elevated Risk

21 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
21
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
2
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$5.9M
Avg loan size
$2.9M
Participating lenders
2

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
1 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

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MEDShrinking franchise system: 114 units with -3.3% YoY decline indicates contracting brand momentum and potential market viability concerns
  2. 02HIGHExtensive litigation history: Multiple concluded arbitration cases involving breach of contract, misrepresentation, and franchise law violations signal franchisor credibility and governance issues
  3. 03MINORNo Item 19 financial disclosure: Average Net Income not provided despite $1.89M average revenue — inability or unwillingness to substantiate profitability claims
  4. 04MINORHigh investment-to-revenue ratio: $1.075M-$2.74M initial investment against $1.89M average revenue creates extended breakeven timeline and capital risk
  5. 05MINORRegulatory action history: State administrative actions for registration and disclosure violations suggest franchisor compliance problems that may disadvantage franchisees
  6. 06MINORDeclining unit count: -3.3% YoY contraction raises questions about unit-level economics, franchisee satisfaction, and brand relevance in casual dining market

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.