FranchiseVerdict
B59/100FDD 2025

Wanpo — Litigation & Risk

Food & Beverage - Coffee & Tea · FDD Items 3, 4 & 5

Back to overview

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
59 / 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
Non-compete
3 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
Washington
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MINORRecent regulatory violations in two states (CA and NY) for illegal franchise sales without registration—demonstrates compliance failures and regulatory risk exposure
  2. 02MEDNo Item 19 financial disclosures (Avg Revenue and Net Income not disclosed)—impossible to validate ROI claims or unit profitability; high opacity risk
  3. 03HIGHGoing Concern status is FALSE—potential financial instability of franchisor raises questions about long-term support and system viability
  4. 04MINORRapid unit growth of 120% YoY with only 11 total units—suggests aggressive scaling with minimal track record; vulnerable to market correction
  5. 05MINORRelatively high initial investment ($109.6K–$196.3K) paired with no financial transparency—unfavorable risk-to-reward ratio
  6. 06MINOR3% royalty on gross (not net) sales—franchisees pay royalties even during unprofitable periods, increasing financial stress

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.