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B65/100FDD 2025

Ask An Adjuster — Litigation & Risk

Other · 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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINORNo financial performance disclosure (Item 19) — cannot validate $124.7-$159.5K investment ROI claims
  2. 02MINOROnly 10 units systemwide with unknown growth trajectory — extremely small and potentially stagnant network
  3. 03MINOR20% royalty on gross revenue is at the high end of insurance adjustment industry (typical: 10-15%)
  4. 04HIGHGoing Concern designation indicates financial instability or operational uncertainty at franchisor level
  5. 05MINOR7-year term is longer than industry standard (5 years typical) with higher commitment risk
  6. 06HIGHNo litigation disclosure provided — incomplete transparency on disputes
  7. 07MINORFranchise fee ($50K) represents 40% of minimum investment — disproportionately high upfront cost

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.