House Doctors: Litigation & Risk
Home Services · FDD Items 3, 4 & 5
Elevated Risk
24 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 24
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 54 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 61
- Government-backed loans issued
- Charge-off rate
- 17.9%
- vs 16% franchise average
- 5-yr charge-off rate
- 12.5%
- Defaults
- 5 loans
- Loans charged off or defaulted
- Total loan volume
- $7.5M
- Avg loan size
- $123K
- Participating lenders
- 16
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
Extracted from FDD Item 3
Litigation Detail
24 disclosed actions involving House Doctors/PSB affiliates and CEO Paul Flick: multiple pending franchisee/franchisor disputes (breach of contract, fraud, trade secret misappropriation) across Window Gang, 360 Painting, Rooterman, Pro-Lift Doors and Clean Juice-related entities; several prior settled franchisee suits (e.g., $190,000 to a CRM vendor, $100,000 in an asset-purchase dispute, $57,500 and $21,000 franchisee settlements); and multiple state regulatory consent orders/AVCs (Maryland, Illinois, Virginia, California, Washington) for FDD disclosure and registration violations, including penalties up to $72,500 plus $10,500 costs and a 36-month California sales bar against Paul Flick.
What drove the 54/100 verdict
Risk Score Breakdown
- 01MEDSevere unit contraction: 24% YoY decline (88 units) indicates system collapse or serious franchisee dissatisfaction
- 02HIGHMultiple fraud and breach of contract lawsuits against franchisor and CEO Paul Flick across affiliated brands (360 Painting, Window Gang, RooterMan) suggests systemic compliance issues
- 03MINORNo Item 19 (Average Net Income) disclosure despite $573K average revenue—franchisor unwilling to show profitability, likely indicating most franchisees are unprofitable
- 04HIGHGoing Concern status is FALSE, which is a critical red flag indicating potential insolvency or business viability concerns
- 05HIGHLitigation involves franchise registration/disclosure law violations, suggesting franchisor has knowingly misrepresented material facts to franchisees
- 06MEDHigh royalty burden (6% + $150/week = ~$8,800 minimum annually) on undisclosed net margins creates unsustainable unit economics
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.