B55/100FDD 2025
Restoration 1 — Litigation & Risk
Cleaning - Commercial & Janitorial · FDD Items 3, 4 & 5
Elevated Risk
7 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
7
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
55 / 100
FranchiseVerdict composite
Rating
MODERATE
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
81
Government-backed loans issued
Default rate
15.8%
vs <3% typical · system-wide
5-yr default rate
14.3%
Defaults
6 loans
Loans charged off or defaulted
Total loan volume
$19.5M
Avg loan size
$241K
Participating lenders
26
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01MINORStagnant unit growth (1.7% YoY) suggests market saturation or franchisee dissatisfaction
- 02HIGHMultiple litigation cases and arbitration settlements indicate franchisor-franchisee relationship issues and potential misrepresentation claims
- 03MINORUnprotected territory creates direct competition risk between franchisees and potential cannibalization
- 04MINORHigh royalty structure (7% of gross or minimum fee) with no Item 19 financial disclosure limits ability to verify income claims
- 05MINORVirginia registration violation suggests compliance or operational lapses by franchisor
- 06MINORRelatively modest average net income ($175K) against total investment range ($126.5K-$309.5K) yields 0.57x-1.39x annual ROI in year one only
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.