Mister Sparky: Litigation & Risk
Home Services · FDD Items 3, 4 & 5
Moderate: Review
1 case disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 86 / 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
- 3
- Government-backed loans issued
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- N/A
- 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
Extracted from FDD Item 3
Litigation Detail
One concluded action: One Hour Air Conditioning Franchising, Benjamin Franklin Franchising, and Mister Sparky Franchising (as plaintiffs) sued a former New Hampshire franchisee's owner (Bobby R. Wilkins) in 2018 for breach of contract on personal guaranties after Franchise Agreements were terminated in connection with the franchisee's Chapter 7 bankruptcy; plaintiffs sought recovery of unpaid fees (MSE sought $244,101); action was non-suited without prejudice in 2018 after Wilkins received personal bankruptcy discharge.
What drove the 86/100 verdict
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.