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Elevated Risk
18 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
18
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
70 / 100
FranchiseVerdict composite
Rating
CAUTION
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
115
Government-backed loans issued
Default rate
9.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
10 loans
Loans charged off or defaulted
Total loan volume
$33.4M
Avg loan size
$290K
Participating lenders
69
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
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
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 70/100 rating
Risk Score Breakdown
- 01MINORShrinking franchise system: 1,685 units declining 2.8% YoY indicates market contraction and franchisee exits
- 02MEDNo financial transparency: Average revenue and net income not disclosed makes ROI assessment impossible
- 03HIGHExistential litigation risk: Antitrust case against NAR and parent company (Anywhere Real Estate) threatens core commission model and industry structure
- 04MINORUnprotected territory: No territorial protection means franchisees compete directly with other CENTURY 21 agents in same area
- 05HIGHHigh litigation exposure: Multiple TCPA class actions, franchisee royalty disputes, and ongoing antitrust proceedings create legal and financial uncertainty
- 06HIGHGoing concern status: False designation suggests potential financial instability at franchisor level
- 07MINORNo Item 19 financials: Inability to validate realistic earnings claims or benchmark against competitors
- 08MINOR10-year term lock-in: Long commitment during industry transition and antitrust uncertainty limits exit flexibility
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.