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B55/100FDD 2026

Jan-Pro Franchise Development — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Moderate — Review

5 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
5
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

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

What drove the 55/100 rating

Risk Score Breakdown

  1. 01MEDChronic unit decline of 0.9% YoY indicates stagnating or contracting system despite $624K avg net income claims
  2. 02HIGHSystemic employee misclassification litigation across multiple states (CA, WA, DC, MA) suggests structural business model vulnerability, not isolated incidents
  3. 03MINORDual royalty structure (4% revenue + 10% unit fees) combined with $130K-$421K investment range lacks transparency on actual franchisee costs and profitability thresholds
  4. 04HIGHNo Item 19 financial performance representation (Going Concern: False) prevents validation of claimed $624K net income across 108 units
  5. 05HIGHRegional developer involvement in litigation indicates franchisor may lack direct control over unit operations and labor compliance

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.