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B55/100FDD 2026

Hoodz — Litigation & Risk

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

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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
55 / 100
FranchiseVerdict composite
Rating
MODERATE
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
22
Government-backed loans issued
Default rate
11.1%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$6.7M
Avg loan size
$303K
Participating lenders
14

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
1.5 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
Michigan
State whose law governs disputes — relevant if you're not based there

What drove the 55/100 rating

Risk Score Breakdown

  1. 01HIGHActive litigation from defaulted franchisee alleging breach of good faith, Michigan Investment Law violations, and tortious interference—suggests potential franchisor conduct issues
  2. 02MEDNet income not disclosed in Item 19—inability to verify actual profitability against $737k average revenue claim
  3. 03MINORMinimal unit growth of 3.1% YoY with only 142 units indicates stagnant system expansion and possible market saturation
  4. 04MEDHigh royalty rate (10% at entry) combined with undisclosed net income creates uncertainty about true unit economics
  5. 05HIGHGoing concern status is False but litigation risk and slow growth suggest financial stability questions

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.