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B59/100FDD 2025

Richard’s Painting — Litigation & Risk

Home Services - Painting · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 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
4
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MINORRecent SEC enforcement action (2024 Consent Order) indicates regulatory compliance failures in franchise sales practices
  2. 02MEDFinancial performance metrics (revenue and net income) completely undisclosed—unable to assess unit economics or ROI potential
  3. 03MINORFranchise fee of $39,950 plus total investment up to $109,500 with no Item 19 disclosure creates opaque risk-return profile
  4. 04MEDModest unit growth of 23.5% YoY from small base (22 units) suggests limited system maturity and brand recognition
  5. 05MINOR10-year term is longer than industry standard (5-7 years), locking franchisees into relationship with compliance-challenged franchisor
  6. 06HIGHNo 'Going Concern' flag is positive, but combined with other factors suggests operational viability questions

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.