A39/100FDD 2024
Mister Sparky — Litigation & Risk
Home Services - Plumbing & HVAC · FDD Items 3, 4 & 5
Moderate — Review
4 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
39 / 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
3
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$1.4M
Avg loan size
$482K
Participating lenders
3
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
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 39/100 rating
Risk Score Breakdown
- 01MEDNet income not disclosed in FDD Item 19 — impossible to validate ROI claims or compare to $119k-$260k investment
- 02HIGHActive litigation for sales underreporting suggests franchisor-franchisee monitoring gaps and potential revenue manipulation issues
- 03HIGHFour total litigation cases (1 pending, 3 concluded) involving trademark misuse, non-compete violations, and collections indicate systemic compliance problems
- 04MINORRoyalty structure creates perverse incentive: $1,500/month minimum means franchisees earning <$300k gross revenue pay higher effective royalty rate (6%+)
- 05MINOR18.1% YoY unit growth appears healthy but lacks context — cannot determine if units are closing or just slower additions; no disclosure of unit closures/failures
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.