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D73/100FDD 2022

Alair Homes Master Franchises — Litigation & Risk

Other · 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
73 / 100
FranchiseVerdict composite
Rating
CAUTION
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
4
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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
Arizona
State whose law governs disputes — relevant if you're not based there

What drove the 73/100 rating

Risk Score Breakdown

  1. 01MINOR50% royalty on net payments is extraordinarily high and will severely compress franchisee profitability
  2. 02MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents validation of ROI claims
  3. 03HIGHGoing Concern = False indicates corporate entity financial instability or structural weakness
  4. 04MINOROnly 16 units with unknown growth trajectory suggests stagnant or declining system
  5. 05HIGHLitigation involving breach of non-compete and incomplete work indicates quality control and legal enforcement issues
  6. 06MINORHigh franchise fee ($250,000) combined with 50% royalty creates unsustainable cost structure for most home service businesses

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.