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F80/100FDD 2025

Waters Edge Winery & Bistro — Litigation & Risk

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

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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
80 / 100
FranchiseVerdict composite
Rating
AVOID
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
8
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$7.0M
Avg loan size
$873K
Participating lenders
8

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 80/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 16.7% YoY (10 units total) — system is contracting, not growing
  2. 02MEDNo average net income disclosed — unable to verify profitability claims; only gross revenue of $881,555 provided
  3. 03MINORNo protected territory — franchisees face direct competition from same-brand locations and cannot defend market share
  4. 04HIGHGoing Concern status is FALSE — franchisor may face operational or financial viability challenges
  5. 05HIGHRecent litigation history including 2021 California regulatory consent order and 2023 trademark/breach settlement — indicates compliance and operational issues
  6. 06MINORHigh investment range ($577K–$1.3M) with declining unit performance — poor ROI indicators and high failure risk
  7. 07MINOR5-6% royalty on gross sales (not net) — franchisees pay royalties even during unprofitable periods
  8. 08MINORNo Item 19 financial performance representation — franchisor refuses to disclose historical unit profitability data

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.