D69/100FDD 2025
Honest Abe Roofing — Litigation & Risk
Home Services - Other · 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
69 / 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
7
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
33.3%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$1.2M
Avg loan size
$176K
Participating lenders
4
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
Indiana
State whose law governs disputes — relevant if you're not based there
What drove the 69/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 13.3% YoY (19 units) indicates system contraction and potential market saturation or franchisee dissatisfaction
- 02HIGHActive litigation by franchisor against franchisee for breach and abandonment suggests operational or support issues and potential franchisor-franchisee conflict
- 03MEDNet income not disclosed in Item 19 prevents accurate ROI analysis on $212k-$582k investment despite $1.5M average revenue claim
- 04MINORHigh initial investment ($59.5k franchise fee + $212k-$582k total) with 5% royalty creates thin margins if average net income doesn't support breakeven within 2-3 years
- 05MINOR7-year term locks franchisee into relationship amid declining unit performance without clear growth trajectory
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.