B65/100FDD 2024
Wagbar — 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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
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
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
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 65/100 rating
Risk Score Breakdown
- 01MEDOnly 1 unit disclosed — impossible to validate system viability or growth trajectory; suggests either new system or severe contraction
- 02HIGHGoing Concern status FALSE — franchisor may have financial instability or operational risk that undermines support
- 03MINORHigh investment-to-revenue ratio: $472k-$1.1M required but average unit generates only $410k revenue (potential 15-year payback period)
- 04MINORWide investment range ($675k spread) indicates unclear cost structure and difficulty predicting actual franchise costs
- 05MINORNo Item 19 financial performance data publicly available — cannot independently verify the $92k net income claim
- 06MINORModest 22.5% net margin ($92k net on $410k revenue) leaves thin margin for error, debt service, and franchisor royalties
- 07MINOR6% royalty on adjusted gross sales is standard but compounds profitability pressure given narrow margins
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.