FranchiseVerdict
Best Choice Roofing logo
A49/100FDD 2024

Best Choice Roofing — Litigation & Risk

Home Services - Other · 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
49 / 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
12
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$2.4M
Avg loan size
$198K
Participating lenders
5

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

What drove the 49/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is False — indicates franchisor financial distress or structural issues despite positive aggregate numbers
  2. 02MINORAggressive unit growth of 200% YoY is unsustainable and suggests recruitment-heavy model rather than organic profitability; high churn risk
  3. 03HIGHTwo active/recent litigation cases involving breach of contract and trademark disputes signal franchisor-franchisee relationship dysfunction and legal exposure
  4. 04MEDNo Item 19 (Financial Performance Representations) disclosed — cannot validate if $1.97M net income claim is achievable for typical franchisee
  5. 05MINORHigh franchise fee ($59,500) combined with 6% royalty creates significant startup burden; breakeven depends on undocumented performance data
  6. 06HIGHExplosive growth (63 units, 200% YoY) combined with litigation suggests system may be adding unprofitable units or experiencing early terminations

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.