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D72/100FDD 2025

Cortz — Litigation & Risk

Home Services - Other · 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
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINOROnly 3 existing units — extremely small, nascent system with no proven scalability or track record
  2. 02MINORNo average revenue or net income disclosure — inability to assess unit economics or franchisee profitability
  3. 03HIGHGoing Concern status is FALSE — suggests potential financial instability at franchisor level
  4. 04MINORHigh initial investment ($103K-$203K) relative to system size creates disproportionate risk for early franchisees
  5. 05MEDNo disclosed unit growth trajectory — cannot determine if system is expanding, stagnant, or contracting
  6. 06MINORTiered royalty structure (6%→4%) indicates franchisor may be dependent on high-volume franchisees to succeed
  7. 07MINOR5-year term is relatively short; insufficient runway to recoup investment in emerging franchise

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.