Pillar To Post: Litigation & Risk
Home Services · FDD Items 3, 4 & 5
Moderate: Review
2 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 2
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 48 / 100
- FranchiseVerdict composite · higher is better
- Rating
- B
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 44
- Government-backed loans issued
- Charge-off rate
- 18.5%
- vs 16% franchise average
- 5-yr charge-off rate
- 25.0%
- Defaults
- 5 loans
- Loans charged off or defaulted
- Total loan volume
- $5.2M
- Avg loan size
- $117K
- Participating lenders
- 32
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
- Not waived
- 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
- FL
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
1 prior action as plaintiff (Pillar To Post v. MS Home Inspections LLC - breach of franchise agreement, trademark infringement; settled March 2026, $25,000 award). 1 prior action as defendant (KJ Loughery Inc. v. Pillar To Post - wrongful non-renewal master franchise; settled February 2018, franchisor purchased master franchises in PA and NJ).
What drove the 48/100 verdict
Risk Score Breakdown
- 01MINORUnit count declining 7.3% YoY (382 units) — shrinking franchise system indicates market saturation or franchisee dissatisfaction
- 02MINORNo average net income disclosure — opacity around profitability makes ROI assessment impossible; cannot verify if $307,908 avg revenue translates to viable income
- 03HIGHTwo litigation cases including master franchisee dispute — suggests franchisor-franchisee relationship strain and potential disputes over performance standards and renewal terms
- 04MEDHigh initial investment ($102,690–$134,290) + 7% royalties with variable monthly minimums ($0–$2,328) creates unpredictable cost structure relative to undisclosed profitability
- 05MINORNo protected territory — franchisee competes with other Pillar To Post locations and master franchisees in same area; risk of encroachment and channel conflict
- 06HIGH5-year term with no stated renewal protections — master franchisee litigation over non-renewal signals potential franchise termination/non-renewal risks
- 07HIGHGoing Concern = False — unclear what this means operationally; needs clarification on franchisor financial stability
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.