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B64/100FDD 2024

Mr. Electric — Litigation & Risk

Home Services - Plumbing & HVAC · FDD Items 3, 4 & 5

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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
64 / 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
136
Government-backed loans issued
Default rate
22.8%
vs <3% typical · system-wide
5-yr default rate
25.0%
Defaults
13 loans
Loans charged off or defaulted
Total loan volume
$23.4M
Avg loan size
$172K
Participating lenders
47

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

What drove the 64/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 financial performance disclosure — cannot verify if $152k-$314.5k investment generates positive ROI or matches advertised averages
  2. 02HIGHAffiliate litigation (Window Genie, Molly Maid) signals potential systemic franchise compliance issues within parent company's multi-brand portfolio
  3. 03MINORModest unit growth (5.0% YoY on 189 units = ~9 net new franchises) suggests market saturation or difficulty recruiting/retaining franchisees
  4. 04MED6% royalty plus undisclosed operating costs create margin pressure in service-based electrical business with high labor costs
  5. 05MINORHigh franchise fee ($42,500) relative to low initial investment floor ($152k) indicates significant upfront cost burden before working capital

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.