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D73/100FDD 2024

Furniture Medic — Litigation & Risk

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

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Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
73 / 100
FranchiseVerdict composite
Rating
CAUTION
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
15
Government-backed loans issued
Default rate
14.3%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$3.1M
Avg loan size
$205K
Participating lenders
12

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

What drove the 73/100 rating

Risk Score Breakdown

  1. 01MINORSystem declining sharply: 15.6% unit contraction YoY (124 units) signals franchisee struggles and reduced support infrastructure
  2. 02MEDNo Item 19 (earnings claim): Average revenue of $289,908 disclosed but net income withheld—impossible to validate actual profitability or ROI on $86,945-$145,250 investment
  3. 03MINORUnprotected territory: Franchisees compete directly with other brand units in same area; no exclusivity despite 7% royalty burden
  4. 04MINORHigh royalty floor: $250/month minimum ($3,000 annually) creates cash flow pressure for underperforming locations in early years
  5. 05MINOROpaque financials: No disclosure of average unit volume (AUV), break-even timeframe, or failure rates raises transparency concerns
  6. 06MINOR5-year term misaligned with recovery: Short renewal period creates reinvestment uncertainty; franchisee may not recoup investment before contract end

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.