AStrongest tier59/100FDD 2025
West Coast Sourdough: Litigation & Risk
Full-Service Restaurants · FDD Items 3, 4 & 5
Elevated Risk
3 cases disclosed in FDD Items 3 and 4. Bankruptcy disclosed in Item 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 3
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- Disclosed
- Franchisor or officer bankruptcy
- Verdict score
- 59 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 10
- Government-backed loans issued
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- 0 loans
- Loans charged off or defaulted
- Total loan volume
- $5.2M
- Avg loan size
- $517K
- Participating lenders
- 0
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
- California
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Two cases: (1) Sourdough & Co., Inc. v. WCSD, Inc. (E.D. California, 2:20-cv-01226-TLN-CKD) - trade dress infringement and franchise law violations claim filed June 2020, motion for judgment on pleadings granted February 28, 2024, settled May 19, 2024; (2) WCSD, Inc. v. Westcoastsourdough.com (E.D. California, 2020-cv-01538-TLN-CKD) - domain misappropriation claim filed June 4, 2020, transferred from E.D. Virginia and consolidated.
What drove the 59/100 verdict
Risk Score Breakdown
- 01MINORThin franchisor net worth of $356,358
- 02HIGH3 litigation matters for a small 49-unit system
- 03MINORRapid 226.7% unit growth indicates early-stage volatility
- 04MEDAudited financials and Item 19 disclosed (positives)
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.