B59/100FDD 2025
Monster Tree Service — Litigation & Risk
Home Services - Lawn & Landscaping · FDD Items 3, 4 & 5
Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
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
86
Government-backed loans issued
Default rate
8.3%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
4 loans
Loans charged off or defaulted
Total loan volume
$38.2M
Avg loan size
$444K
Participating lenders
33
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 59/100 rating
Risk Score Breakdown
- 01MEDSignificant unit decline of 17.8% YoY (176 units) indicates system contraction and potential franchisee dissatisfaction
- 02HIGHTwo arbitration cases involving predecessor entity with fraud allegations, even if settled without wrongdoing findings, suggest historical governance/trust issues
- 03MINORTiered royalty structure with 6.5% base rate on first $1M revenue is aggressive; at average revenue of $1.32M, franchisees pay ~$86K+ annually in royalties alone (6.5% of $1.32M)
- 04MINORNo Item 19 financial performance representation limits ability to validate the $199K average net income claim independently
- 05MINORInitial investment of $415K-$534K requires ~2.1-2.7 years to recoup at average net income levels, assuming no growth needed
- 06MINORTiered royalty structure incentivizes franchisor to cap franchisee growth (lower rates only kick in at $1M+ thresholds), creating misaligned interests
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.