FranchiseVerdict
Assisted Living Locators logo
F79/100FDD 2022

Assisted Living Locators — Litigation & Risk

Health & Wellness - Senior Care · FDD Items 3, 4 & 5

Back to overview

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
79 / 100
FranchiseVerdict composite
Rating
AVOID
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
36
Government-backed loans issued
Default rate
35.7%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
5 loans
Loans charged off or defaulted
Total loan volume
$8.9M
Avg loan size
$248K
Participating lenders
9

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 79/100 rating

Risk Score Breakdown

  1. 01MEDSystem contracting sharply: only 0.8% YoY unit growth with 133 units suggests stagnation or decline; mature systems typically grow 3-5%
  2. 02HIGHLitigation pattern: two separate legal actions (one pending arbitration, one settled) indicate franchisor-franchisee disputes over compliance and post-termination conduct, signaling enforcement issues
  3. 03MINORThin profit margins: $25,005 average net income on $130,099 revenue equals only 19.2% net margin after 8% royalty (10.4% of gross), leaving minimal buffer for owner salary and reinvestment
  4. 04MINORHigh royalty burden relative to profitability: 8% royalty on gross (not net) collected revenues creates cash flow risk if collections slow, with no Item 19 provided to validate earnings claims
  5. 05HIGHGoing Concern flag: true status raises questions about franchisor financial stability and ability to support franchisees long-term

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.