A40/100FDD 2024
Pearle Vision — Litigation & Risk
Health & Wellness - Other · FDD Items 3, 4 & 5
Elevated Risk
15 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
15
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
40 / 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
103
Government-backed loans issued
Default rate
1.5%
vs <3% typical · system-wide
5-yr default rate
33.3%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$49.3M
Avg loan size
$479K
Participating lenders
45
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
1 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
Ohio
State whose law governs disputes — relevant if you're not based there
What drove the 40/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-1.6% YoY) indicates contracting franchise system with 503 units
- 02HIGHMultiple serious litigation issues including antitrust, data breach, false advertising, and franchisee fraud allegations suggest systemic operational and compliance problems
- 03HIGHNo Item 19 financial disclosure (Going Concern = False) prevents independent verification of the $1.247M average revenue claim
- 04MINORUnprotected territory creates direct competition risk and cannibalization between franchisees
- 05MINORHigh initial investment ($679K-$1.27M) combined with declining system growth increases franchisee failure risk
- 06MINOR7% royalty on gross revenues (not net) means royalties paid even during unprofitable periods
- 07HIGHLitigation history includes fraud allegations against franchisor toward franchisees, indicating potential relationship deterioration
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.