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D71/100FDD 2022
Wafels & Dinges — Litigation & Risk
Food & Beverage - Quick 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
71 / 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
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
Governing law
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 71/100 rating
Risk Score Breakdown
- 01MINOROnly 10 units system-wide with unknown/stagnant growth trajectory raises scalability concerns
- 02MEDNo Item 19 financial performance representations disclosed despite $900k average revenue claims
- 03MINORUnprotected territory creates direct competition risk from other franchisees in same area
- 04MINORHigh investment-to-net-income ratio ($217-498k investment vs $286k avg net income) indicates 9-18 month breakeven at best
- 05HIGHGoing Concern notation absent but tiny unit count suggests fragile franchisor operations and sustainability questions
- 06MINOR6% royalty on net sales is reasonable, but viability depends entirely on achieving $900k revenue baseline
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.