FranchiseVerdict
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F83/100FDD 2022

Pet Depot — Litigation & Risk

Personal Services - Pet Care · 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
83 / 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
12
Government-backed loans issued
Default rate
11.1%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$5.8M
Avg loan size
$483K
Participating lenders
8

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

What drove the 83/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-3.6% YoY) indicates system contraction and potential market saturation or franchisee dissatisfaction
  2. 02MEDNo Item 19 financial disclosure (Avg Revenue/Net Income not disclosed) prevents accurate ROI modeling and suggests franchisor may be hiding poor unit economics
  3. 03MINORWide investment range ($177.5K–$913.5K) with no clarity on what drives 5x variance, indicating inconsistent site costs or hidden expenses
  4. 04MINORUnprotected territory creates direct competition risk; multiple franchisees in same area will cannibalize sales and reduce individual unit profitability
  5. 05HIGHGoing Concern status = False is ambiguous (should be True for healthy franchisor); potential financial instability of parent company threatens franchisee support
  6. 06MED5% royalty on undisclosed gross sales creates blind spot; unable to verify if 5% is competitive or if franchisees are actually profitable at that rate
  7. 07MED29 total units is extremely small system with limited brand recognition, economies of scale, or supply chain negotiating power

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.