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B63/100FDD 2025

Decorating Den Interiors — Litigation & Risk

Retail · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 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
1
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
$130K
Avg loan size
$130K
Participating lenders
1

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

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-5.0% YoY) indicates shrinking franchise system and potential market saturation or franchisee dissatisfaction
  2. 02MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents accurate ROI assessment on $52,725–$73,400 investment
  3. 03HIGHRecent litigation (2023) with $112,000 settlement over service delivery failures raises quality control and customer satisfaction concerns
  4. 04MINORUnprotected territory creates direct competition risk from other DDSI franchisees and non-franchised interior designers
  5. 05MEDHigh royalty burden (9%–7%) combined with undisclosed profitability means franchisees may struggle to achieve positive cash flow
  6. 06MINORShort 5-year franchise term limits ability to recoup initial $39,900 franchise fee and build long-term equity

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.