D75/100FDD 2024
Home Clean Heroes — Litigation & Risk
Cleaning - Commercial & Janitorial · 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
75 / 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
12
Government-backed loans issued
Default rate
33.3%
vs <3% typical · system-wide
5-yr default rate
33.3%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$1.8M
Avg loan size
$147K
Participating lenders
4
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
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Virginia
State whose law governs disputes — relevant if you're not based there
What drove the 75/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 (Financial Performance Representations) disclosed — cannot independently verify claimed $291k average revenue or $273k net income figures
- 02MEDExtremely high net income relative to revenue (94% margin) is unrealistic and suggests either incomplete expense reporting or cherry-picked data from top performers
- 03MINORRapid unit growth (33.3% YoY) with only 18 total units indicates very recent franchise launch — minimal long-term operational track record
- 04MINORHigh franchise fee ($50k) represents 44.6% of minimum investment, reducing working capital available for startup operations
- 05HIGHGoing Concern status is False but absence of disclosure details raises questions about franchisor financial stability and support capacity
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.