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A51/100FDD 2026

LaundroLab — Litigation & Risk

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

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Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
51 / 100
FranchiseVerdict composite
Rating
STRONG
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
15
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$13.5M
Avg loan size
$903K
Participating lenders
7

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

What drove the 51/100 rating

Risk Score Breakdown

  1. 01MINORExtreme unit growth of 233% YoY suggests either aggressive expansion phase or previous contraction recovery—unsustainable growth rates carry collapse risk
  2. 02MINORNet profit margin of 22% ($118,677 on $537,787 revenue) is healthy but average revenue figure lacks clarity on whether this includes top/bottom quartile variance
  3. 03MINORHigh initial investment ($1.03M–$1.87M) with relatively modest average net income ($118,677) yields 9–16 year payback period before accounting for ongoing royalties
  4. 04MINORRoyalty structure (greater of $500/month floor or 6%) incentivizes revenue recognition games and creates cash flow pressure for lower-performing units
  5. 05MEDOnly 24 units total is a micro-franchise system with limited operational scale and data reliability for projections
  6. 06MEDNo Item 19 financial performance representation disclosed in provided data—critical missing validation

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.