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D70/100FDD 2025

Z!Eats — Litigation & Risk

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

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Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
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
Pennsylvania
State whose law governs disputes — relevant if you're not based there

What drove the 70/100 rating

Risk Score Breakdown

  1. 01MINORUnit count collapsed 28.6% YoY (36 units) indicating system-wide distress and franchisee attrition
  2. 02MEDNet income not disclosed despite average revenue of $577k — suggests unprofitable or confidential poor performance
  3. 03HIGHGoing Concern status is FALSE — potential financial instability at franchisor level
  4. 04HIGHNo litigation disclosed but rapid unit decline suggests underlying operational/support failures
  5. 05MINOR6% royalty on $577k average revenue only yields $34.6k annually — insufficient to justify $497-712k investment
  6. 06MINORFranchise fee $35k is moderate but ROI horizon is unclear without net income disclosure

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.