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A51/100FDD 2024
Coldwell Banker Commercial® — Litigation & Risk
Real Estate · FDD Items 3, 4 & 5
Elevated Risk
13 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
13
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
51 / 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
13
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
$6.8M
Avg loan size
$523K
Participating lenders
7
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
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
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 51/100 rating
Risk Score Breakdown
- 01MINORNo Item 19 financial performance disclosure—cannot validate average revenue or profitability claims
- 02MEDFive pending class actions involving antitrust and buyer-broker commission disputes create systemic legal uncertainty and potential regulatory liability
- 03MINORSlow unit growth (6.2% YoY) with only 139 locations suggests market saturation, franchisee underperformance, or brand weakness in commercial real estate segment
- 04MINORUnprotected territory means franchisees compete directly with other CBC franchisees and company-owned offices for the same clients
- 05MINORTiered royalty structure (6% up to $1M, then 3%) incentivizes franchisees to cap growth artificially to avoid higher tax burden
- 06MINORMultiple trademark infringement cases and regulatory proceedings (HUD, FTC, Washington AG) indicate compliance and brand integrity risks
- 07MINORModerate-to-high initial investment ($35.5K–$733.5K) with no performance benchmarks to justify cost
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.