Sonitrol: Litigation & Risk
Home Services · FDD Items 3, 4 & 5
Moderate: Review
5 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 5
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 64 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- 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
- 6
- 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
- $2.8M
- Avg loan size
- $466K
- Participating lenders
- 5
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
- Delaware
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Four concluded civil actions disclosed: (1) Care First Pharmacy v. Stanley Convergent Security Solutions, Inc. (Texas, 2017) - security system failure at pharmacy, settled for $10,000 in December 2017; (2) Oris Development (Cambie) Corp. v. Sonitrol entities (Canada, 2012) - fire loss at condominium development (~$12M CAD claimed), settled for less than $25,000 in March 2016; (3) Collections Fine Jewelry v. Stanley Convergent Security Solutions Inc. (Texas, 2011) - alarm system failure at jewelry store, settled for $800,000 in May 2014; (4) The State of Louisiana/UNO Foundation v. Honeywell International Inc./Sonitrol (Louisiana, 2008) - failure to monitor building and notify of sprinkler activation causing flood damage. All cases involve alleged failures of security/monitoring systems.
What drove the 64/100 verdict
Risk Score Breakdown
- 01MINOR4 concluded suits, 1 pending class action vs parent
- 02MINORnet worth $11.59B, net income $1.6B (parent scale)
- 03MINORno Item 19 disclosure
- 04MINORaudited financials
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.