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B66/100FDD 2025

Wienerschnitzel — Litigation & Risk

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

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 100
FranchiseVerdict composite
Rating
MODERATE
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
83
Government-backed loans issued
Default rate
23.9%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
17 loans
Loans charged off or defaulted
Total loan volume
$44.1M
Avg loan size
$532K
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

What drove the 66/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (1.3% YoY contraction in 316-unit system indicates stagnation/shrinkage)
  2. 02MEDNo Item 19 financial performance data disclosed — cannot verify the $1.127M average revenue claim or validate unit economics
  3. 03HIGHRecent litigation (breach of contract/fraud allegations) signals potential franchisor-franchisee disputes, even though dismissed
  4. 04MINORWide investment range ($519K–$2.5M) suggests inconsistent buildout costs and unclear path to profitability
  5. 05MINORNo net income disclosure prevents ROI assessment — 5% royalty on $1.127M average revenue yields only ~$56K in gross royalties, leaving thin margins after COGS, labor, rent

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.