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B66/100FDD 2025

CR3 American Exteriors — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Elevated Risk

9 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
9
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 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
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
Virginia
State whose law governs disputes — relevant if you're not based there

What drove the 66/100 rating

Risk Score Breakdown

  1. 01HIGHFounder John T. Hewitt has substantial litigation history including fraud allegations from Liberty Tax tenure, creating reputational and operational risk
  2. 02MINORNo average revenue or net income disclosure (Item 19) prevents validation of $77k-$222k investment ROI claims
  3. 03MINORRapid 50% YoY unit growth with only 16 total units suggests early-stage franchise with unproven business model and high failure risk
  4. 04MINORMinimum $2,000/month royalty floor ($24k annually) represents 31% of lowest investment on a breakeven basis
  5. 05HIGHNo going concern statement indicates potential financial instability at corporate level affecting franchisee support
  6. 06MINORExterior services market is highly competitive with low barriers to entry and price-sensitive customers

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.