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B62/100FDD 2024

Coverall — Litigation & Risk

Cleaning - Commercial & Janitorial · FDD Items 3, 4 & 5

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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
62 / 100
FranchiseVerdict composite
Rating
MODERATE
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
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.5M
Avg loan size
$117K
Participating lenders
9

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
1.5 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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 62/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-4.4% YoY) indicates a shrinking franchise system despite 20-year maturity
  2. 02MINORMultiple active class action lawsuits regarding worker misclassification and wage/hour violations create significant legal and operational risk
  3. 03MINOR1994 FTC consent decree suggests history of deceptive earnings claims and disclosure violations
  4. 04MINORNo Item 19 financial disclosure means franchisees cannot verify stated profitability claims independently
  5. 05MINORUnprotected territory creates direct competition risk and pricing pressure from other franchisees
  6. 06MEDHigh franchise fee ($40,320) relative to low disclosed investment range ($17,917–$62,908) suggests unclear total startup costs
  7. 07HIGHGoing Concern flag is FALSE but declining unit economics and litigation suggest potential solvency stress

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.