A28/100FDD 2024
Benjamin Franklin Plumbing — Litigation & Risk
Home Services - Plumbing & HVAC · FDD Items 3, 4 & 5
Elevated Risk
6 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
6
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
28 / 100
FranchiseVerdict composite
Rating
STRONG
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
46
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
Total loan volume
$16.6M
Avg loan size
$361K
Participating lenders
19
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
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 28/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Average Unit Volume) disclosed despite $3.07M system average revenue — inability or unwillingness to substantiate franchisee earnings claims
- 02HIGHActive litigation pattern: ongoing sales underreporting suit (David Michael), trademark misuse claims, and non-compete enforcement actions suggest systemic compliance and brand integrity issues
- 03MINORHigh initial investment ($129K-$270K) paired with $1,500 minimum monthly royalty ($18K/year floor) creates negative cash flow risk for underperforming units in early years
- 04MINORAggressive growth trajectory (17.8% YoY unit expansion) while defending multiple lawsuits raises concerns about franchisee vetting and support quality
- 05MEDMinimum royalty structure means franchisees earning under $300K gross revenue annually subsidize the franchisor, compressing already-undisclosed profit margins
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.