Express Employment Professionals: Litigation & Risk
Business Services · FDD Items 3, 4 & 5
Moderate: Review
1 case disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 79 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 113
- Government-backed loans issued
- Charge-off rate
- 2.0%
- vs 16% franchise average
- 5-yr charge-off rate
- 7.7%
- Defaults
- 1 loans
- Loans charged off or defaulted
- Total loan volume
- $36.8M
- Avg loan size
- $326K
- Participating lenders
- 49
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
- Not waived
- 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
- OK
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
1 active case: Dildar Minhas (former franchisee) v. Express Employment International et al., filed December 2025 in Ontario Superior Court, alleging fraud, misrepresentation and breach; plaintiff seeks $1,000,000 in damages. Express denies all allegations. 5 plaintiff suits filed in 2025 to collect outstanding debt from franchisees/former franchisees. 2 prior actions now resolved (Stoddart class action settled 2021; Sydlynn settled July 2021).
What drove the 79/100 verdict
Risk Score Breakdown
- 01MINORDeclining unit count (-3.2% YoY with 765 units) indicates system contraction and potential market saturation or franchisee dissatisfaction
- 02MINORExceptionally high royalty structure (40% of gross margin) severely limits franchisee profitability and leaves minimal cushion for operating expenses
- 03HIGHMultiple litigation patterns: fraud allegations, debt collection lawsuits against franchisees, wage/labor disputes, and territory misrepresentation claims suggest systemic franchisor-franchisee tensions
- 04MINORNo Item 19 (average net income) disclosure prevents transparent ROI analysis despite high royalty burden—critical red flag for a $131k-$599k investment
- 05MINORSettled class action on labor/wage statements raises compliance and operational risk concerns that may persist post-settlement
- 06MINORFormer franchisee allegations of territory misrepresentation directly undermine the franchise model's core value proposition
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.