FranchiseVerdict
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D72/100FDD 2025

America’s Color Consultants — Litigation & Risk

Home Services - Painting · 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
72 / 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
Virginia
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINOROnly 6 units in entire system with unknown/stagnant growth trajectory indicates minimal market validation and system viability
  2. 02MEDNo average revenue or net income disclosure (missing Item 19) prevents ROI analysis and suggests poor or inconsistent franchisee performance
  3. 03HIGHGoing concern status is FALSE, indicating potential financial distress at franchisor level and sustainability risk
  4. 04MINORUnusually low franchise fee ($10,000) combined with high royalty floor ($50/month minimum) suggests franchisor relies on recurring fees rather than franchisee success
  5. 05MINORTiny unit count makes territory 'protection' meaningless and indicates difficulty recruiting/retaining franchisees
  6. 06MEDHigh investment range relative to unit count ($14.6K-$44.6K) with no disclosed average revenue creates blind spot for ROI expectations

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.