D74/100FDD 2024
Homewatch CareGivers — Litigation & Risk
Health & Wellness - Senior Care · FDD Items 3, 4 & 5
Moderate — Review
1 case disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
74 / 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
70
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default rate
50.0%
Defaults
8 loans
Loans charged off or defaulted
Total loan volume
$18.9M
Avg loan size
$270K
Participating lenders
33
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
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 74/100 rating
Risk Score Breakdown
- 01MEDUnit decline of 4.1% YoY indicates shrinking franchise system despite $1.2M+ average revenue
- 02MEDNet income not disclosed in Item 19 prevents ROI validation; only gross revenue available
- 03HIGHLitigation history shows aggressive enforcement against franchisees, including trade secret claims and non-compete actions
- 04MEDHigh initial investment ($92K-$154K) relative to disclosed profitability metrics creates elevated financial risk
- 05HIGHGoing Concern flag is FALSE but declining unit count (-9 units) suggests potential underlying business model stress
- 06MED5% minimum royalty structure with no disclosed floor may create cash flow pressure during market downturns
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.