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A36/100FDD 2024

One Hour Heating & Air Conditioning — Litigation & Risk

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

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Elevated Risk

8 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
36 / 100
FranchiseVerdict composite
Rating
STRONG
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
1
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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 36/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Unit Volume) disclosed despite $1.07M average revenue claim—inability to verify earnings claims
  2. 02HIGHMultiple litigation cases involving trademark infringement, non-compete violations, and sales underreporting suggest systemic compliance issues
  3. 03MINORRoyalty structure creates aggressive floor ($1,500/month minimum = $18,000 annually) that pressures small operators and incentivizes underreporting
  4. 04MINOR9.4% YoY unit growth is modest for a 413-unit system; suggests market saturation or franchisee struggles
  5. 05MEDHigh initial investment ($71K-$270K) combined with undisclosed net income creates severe opacity around ROI timeline
  6. 06MINORCollection actions for unpaid fees indicate franchisee financial distress across the system

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.