A37/100FDD 2025
PatchMaster — Litigation & Risk
Home Services - Other · FDD Items 3, 4 & 5
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
37 / 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
19
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.1M
Avg loan size
$164K
Participating lenders
8
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
New Jersey
State whose law governs disputes — relevant if you're not based there
What drove the 37/100 rating
Risk Score Breakdown
- 01MEDNet income not disclosed in FDD despite average revenue of $330,653 — inability to validate profitability claims
- 02MINORComplex royalty structure (greater of 9% on first $150k or minimum monthly fee) creates unpredictable cost burden — needs clarification on actual franchisee payments
- 03MINOR2014 regulatory settlement in Virginia for operating without registration — suggests compliance management gaps, though resolved
- 04MEDHigh initial investment ($54,500 franchise fee + $122,950–$242,450 total) relative to disclosed revenue without net income transparency
- 05MEDModerate unit growth (21.5% YoY) is healthy but system is still small (133 units) — limited scale economics and peer learning
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.