Wienerschnitzel: Litigation & Risk
Quick-Service Restaurants · FDD Items 3, 4 & 5
Moderate: Review
1 case disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 46 / 100
- FranchiseVerdict composite · higher is better
- Rating
- C
- 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
- 117
- Government-backed loans issued
- Charge-off rate
- 21.0%
- vs 16% franchise average
- 5-yr charge-off rate
- 0.0%
- Defaults
- 17 loans
- Loans charged off or defaulted
- Total loan volume
- $64.3M
- Avg loan size
- $549K
- Participating lenders
- 36
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
Hooman Nissani; Playa Vista Wienerschnitzel, Inc. v. Galardi Group Franchise Corp., Galardi Group Franchise & Leasing, LLC, et al. (Superior Court of California for Orange County, No. 30-2019-01115068CU-CO-CJC, filed November 27, 2019). Alleged breach of contract and fraud by former franchisee. Dismissed February 24, 2025.
What drove the 46/100 verdict
Risk Score Breakdown
- 01MINORSmall franchisor net loss of -$137,892
- 02MINORPositive net worth $6.08M, low turnover 4.1%
- 03HIGH1 litigation matter, dismissed Feb 2025
- 04MEDAudited financials, Item 19 disclosed
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.