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B55/100FDD 2024

Buildingstars — Litigation & Risk

Cleaning - Commercial & Janitorial · 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
55 / 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
No
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Missouri
State whose law governs disputes — relevant if you're not based there

What drove the 55/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Net Income) disclosed — cannot verify actual franchisee profitability despite $2.2M average revenue claim
  2. 02MINOROnly 15 units system-wide with unknown growth trajectory — insufficient data on unit economics and system momentum
  3. 03MINORHigh initial investment ($113.7K-$287.5K) relative to small franchise footprint raises sustainability questions
  4. 04HIGHGoing Concern issue = franchisor financial instability — red flag for support, training, and long-term viability
  5. 05MINORRoyalty structure (1-5% variable) lacks transparency — unclear what triggers higher percentages and actual franchisee burden
  6. 06HIGHNo litigation disclosed but Going Concern status suggests financial distress that may precede legal action

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.