![Smash My Trash logo](https://cdn.brandfetch.io/smashmytrash.com/w/128/h/128/fallback/lettermark?c=<img src="https://cdn.brandfetch.io/domain/apple.com?c=1idsvcTjLv919Ax0E2s" alt="Logo by Brandfetch" />){kind=small}
Elevated Risk
6 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
6
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
38 / 100
FranchiseVerdict composite
Rating
STRONG
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
101
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$38.3M
Avg loan size
$379K
Participating lenders
42
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
3 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
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 38/100 rating
Risk Score Breakdown
- 01HIGHGoing Concern status is FALSE — existential viability concern for franchisor
- 02HIGHLitigation history includes fraudulent misrepresentation claims and multi-million dollar awards against franchisor in Washington
- 03MINORExtremely slow unit growth (1.6% YoY) with 520 units suggests stagnation or contraction phase
- 04MINORNo Net Income disclosure despite $876k average revenue — profitability opacity is major red flag
- 05MINORHigh minimum royalty ($2,600/truck/month = $31.2k annually) creates fixed cost burden regardless of performance
- 06MINORDual royalty structure (8% compaction + 8% ancillary) on net revenue creates aggressive fee extraction
- 07HIGHItem 19 disclosure violations cited in litigation — franchisor may have misrepresented earnings
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.