B55/100FDD 2025
ServiceMaster Restore — Litigation & Risk
Cleaning - Commercial & Janitorial · FDD Items 3, 4 & 5
Elevated Risk
8 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
8
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
392
Government-backed loans issued
Default rate
8.0%
vs <3% typical · system-wide
5-yr default rate
3.1%
Defaults
20 loans
Loans charged off or defaulted
Total loan volume
$153.4M
Avg loan size
$391K
Participating lenders
142
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
1 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
Georgia
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (-1.0% YoY) suggests system contraction and potential saturation or franchisee dissatisfaction
- 02MINORNo Item 19 (average net income) disclosure creates opacity around actual profitability despite $2.7M average revenue
- 03HIGHHistory of litigation involving misrepresentation, fraud, and breach of contract allegations against predecessors raises due diligence concerns
- 04MINORUnprotected territory exposes franchisees to direct competition from other ServiceMaster Restore locations and brand cannibalization
- 05MEDHigh royalty structure (10% of gross sales or $750 minimum) reduces net margins, especially problematic without disclosed net income benchmarks
- 06HIGHPending vendor program removal litigation suggests potential franchisor relationship deterioration and operational instability
- 07MINOR5-year term is relatively short; renewal not guaranteed, creating long-term business continuity risk
- 08MEDInitial investment range ($266K-$442K) is substantial given unit decline and lack of profitability transparency
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.