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F87/100FDD 2024

Outdoor Lighting Perspectives — Litigation & Risk

Business Services - Printing & Signs · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
87 / 100
FranchiseVerdict composite
Rating
AVOID
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
34
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
8 loans
Loans charged off or defaulted
Total loan volume
$8.4M
Avg loan size
$248K
Participating lenders
20

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

What drove the 87/100 rating

Risk Score Breakdown

  1. 01HIGHNo Item 19 financial performance representations ('Going Concern: False') limits ability to validate claimed $182,551 average net income
  2. 02HIGHLitigation history shows trademark/contract enforcement issues suggesting potential franchisor-franchisee relationship strain
  3. 03MINORRoyalty structure complexity (7% or $1,100/mo minimum) may create cash flow pressure for units below $157,143 in monthly revenue
  4. 04MINORStrong YoY growth (16.4%) masks unit quality concerns—rapid expansion can indicate recruitment-focused model rather than unit profitability focus
  5. 05MINORHigh franchise fee ($59,500) relative to startup range floor ($127,000) represents 47% sunk cost before operations begin

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.