FranchiseVerdict
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D76/100FDD 2023

NEXClean — 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
76 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 76/100 rating

Risk Score Breakdown

  1. 01MINOROnly 2 existing franchisees — critically small system with no demonstrated scalability or growth trajectory
  2. 02MINORNo average revenue or net income disclosure — impossible to validate ROI or assess realistic earnings potential
  3. 03MINORNo Item 19 financial performance representations — franchisor provides zero earnings claims or benchmarks
  4. 04HIGHGoing Concern flag is FALSE but franchisor stability is unverifiable with minimal unit base
  5. 05MINORHigh initial investment ($71.7K-$110.4K) combined with dual royalty structure (5-7.5%) creates significant cash flow pressure with unproven unit economics
  6. 06MINOR10-year term with only 2 franchisees suggests either very recent launch, failed recruitment, or serious market acceptance issues
  7. 07MINORLack of growth data — no disclosure of new unit pipeline, expansion plans, or historical growth rates

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.