Interim Healthcare: Litigation & Risk
Senior Care · FDD Items 3, 4 & 5
Elevated Risk
6 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 6
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 74 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- 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
- 42
- Government-backed loans issued
- Charge-off rate
- 9.5%
- vs 16% franchise average
- 5-yr charge-off rate
- 33.3%
- Defaults
- 4 loans
- Loans charged off or defaulted
- Total loan volume
- $22.5M
- Avg loan size
- $537K
- Participating lenders
- 22
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
- No
- Right of first refusal
- Yes
- Franchisor can match any purchase offer when you try to sell
- Governing law
- Florida
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Multiple pending/concluded suits involving franchisee disputes (wrongful death notice, unpaid royalties, territory encroachment), and a resolved 2019 NY federal suit by Community Care Companions (settled 2025), a JAMS arbitration for unpaid legal fees, and a Texas/Florida Falcon Healthcare franchise dispute resolved via a $17,062,294.09 settlement/transition agreement; affiliate Coverall North America had a 1994 FTC consent decree with $100,000 civil penalty.
What drove the 74/100 verdict
Risk Score Breakdown
- 01MINORDeclining unit count (-3.4% YoY) suggests system contraction and potential franchisee struggles
- 02MEDNo average net income disclosed in Item 19 prevents realistic ROI assessment despite $156k-$628k investment range
- 03HIGHMultiple litigation categories including wrongful death notice, wage/hour disputes, and historical consent decree indicate operational and compliance risks
- 04MINORTiered royalty structure (3.25%-5.5%) creates variable profitability uncertainty; higher rates on non-Medicare sales may squeeze margins
- 05MINORHome healthcare/hospice industry faces increasing regulatory scrutiny, labor cost inflation, and reimbursement pressure
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.