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A21/100FDD 2025
Hallmark Homecare — Litigation & Risk
Health & Wellness - Senior Care · FDD Items 3, 4 & 5
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
21 / 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
13
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.6M
Avg loan size
$124K
Participating lenders
6
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
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
Nevada
State whose law governs disputes — relevant if you're not based there
What drove the 21/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Financial Performance Representations) disclosed — cannot independently verify the $192,788 average net income claim
- 02MINOR44% YoY unit growth is exceptionally high and may indicate unsustainable expansion, market saturation risk, or inflated recruitment numbers
- 03MEDHigh initial investment range ($109.5K–$279.5K) relative to disclosed average net income ($192.8K) creates tight ROI timeline and cash flow vulnerability
- 04MINORRoyalty structure has $500/territory minimum floor which could exceed 6% on low-revenue territories, creating profitability squeeze for smaller operators
- 05HIGHNo litigation disclosed but homecare franchises face inherent liability exposure (worker safety, client care incidents, wage/hour compliance) — absence of disclosure is itself concerning
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.