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F87/100FDD 2025

Painter1 — Litigation & Risk

Home Services - Painting · 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
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
13
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$2.3M
Avg loan size
$180K
Participating lenders
6

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

What drove the 87/100 rating

Risk Score Breakdown

  1. 01MEDNet income not disclosed in Item 19 — impossible to validate actual profitability against $80K-$168K investment
  2. 02HIGHGoing Concern status is FALSE — suggests auditor raised substantial doubt about franchisor's ability to continue operations
  3. 03MEDModest unit growth of 10.5% YoY with only 42 total units indicates slow system expansion and limited brand momentum
  4. 04MINORHigh franchise fee ($54,500) represents 68% of minimum investment — aggressive upfront cost structure
  5. 05HIGHNo litigation disclosed may be incomplete; inability to verify franchisee satisfaction or dispute history

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.