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A45/100FDD 2025

Fastsigns — Litigation & Risk

Business Services - Printing & Signs · FDD Items 3, 4 & 5

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
45 / 100
FranchiseVerdict composite
Rating
STRONG
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
437
Government-backed loans issued
Default rate
12.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
36 loans
Loans charged off or defaulted
Total loan volume
$142.8M
Avg loan size
$327K
Participating lenders
126

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
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 45/100 rating

Risk Score Breakdown

  1. 01MINORSlow unit growth of only 2.3% YoY suggests market saturation or franchisee underperformance in a 705-unit system
  2. 02HIGHLitigation involving founder/leadership (Brad Brutocao and John Roth) at Floor & Décor raises governance and judgment concerns that may extend to FASTSIGNS operations
  3. 03MINORBreach of contract arbitration against Hassan Brothers LLC indicates potential franchisee disputes and possible franchisor enforcement issues
  4. 04MINORItem 19 (Financial Performance Representations) absent — the $1.11M avg revenue figure cannot be independently verified or attributed to specific unit types/locations

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.