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B66/100FDD 2025

OctoClean — Litigation & Risk

Cleaning - Commercial & Janitorial · 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
66 / 100
FranchiseVerdict composite
Rating
MODERATE
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 66/100 rating

Risk Score Breakdown

  1. 01HIGHActive litigation involving breach of contract and trade secret misappropriation indicates operational/legal disputes with franchisees
  2. 02MINORCalifornia regulatory consent order for registration and disclosure violations suggests franchisor failed to meet legal obligations to franchisees
  3. 03MINORStagnant unit growth (1.9% YoY on only 55 units) indicates market rejection or franchisee struggles
  4. 04MEDNo average revenue or net income disclosure (missing Item 19) prevents assessment of franchisee profitability
  5. 05MINORUnprotected territory creates direct competition risk from other OctoClean franchisees
  6. 06MINORHigh franchise fee ($13,500) relative to initial investment range suggests low barrier to entry for franchisor but poor ROI potential
  7. 07MINORRoyalty structure ($100-$250 monthly minimum) may exceed profits for struggling locations

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.