B64/100FDD 2025
Vitality Bowls — Litigation & Risk
Food & Beverage - Full Service · FDD Items 3, 4 & 5
Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
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
40
Government-backed loans issued
Default rate
19.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
4 loans
Loans charged off or defaulted
Total loan volume
$11.0M
Avg loan size
$275K
Participating lenders
20
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 64/100 rating
Risk Score Breakdown
- 01MINORNo Item 19 (Average Unit Volume) disclosure despite $591,917 average revenue claim — inability to verify earnings claims and widespread franchisee profitability
- 02HIGHTwo separate litigation/arbitration cases involving breach of contract and fraud allegations settled with monetary payments by franchisor — suggests systemic disputes and potential broken promises
- 03MEDModest unit growth (10.2% YoY) with only 70 units indicates slow market penetration and limited network stability after multiple years of operation
- 04MEDHigh investment range ($208,800–$683,140) relative to disclosed revenue creates unclear ROI and payback period — franchisees may not recoup investment within reasonable timeframe
- 05HIGHGoing Concern status marked as False — potential financial instability or accounting irregularities warrant investigation into franchisor's solvency
- 06MINOR6% royalty on gross sales (not net) means franchisees pay royalties even on low-margin or loss-making transactions, compounding profitability pressure
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.