CAverage43/100FDD 2025
Realty Executives: Litigation & Risk
Real Estate · FDD Items 3, 4 & 5
Elevated Risk
9 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 9
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- -
- Franchisor or officer bankruptcy
- Verdict score
- 43 / 100
- FranchiseVerdict composite · higher is better
- Rating
- C
- 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
- 5
- Government-backed loans issued
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- N/A
- Loans charged off or defaulted
- Total loan volume
- $893K
- Avg loan size
- $179K
- Participating lenders
- 4
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
- 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
- Arizona
- State whose law governs disputes. Relevant if you're not based there
What drove the 43/100 verdict
Risk Score Breakdown
- 01HIGH9 litigation matters incl. antitrust class action (stayed as to REI)
- 02MINORVery high turnover 29.46% and negative growth -13.7%
- 03MINORNo Item 19 disclosure
- 04MINOROffset: positive equity $2.35M, net income $1.67M
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.