FranchiseVerdict
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A49/100FDD 2026

Stratus Building Solutions / Stratus Clean — Litigation & Risk

Other · FDD Items 3, 4 & 5

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Moderate — Review

4 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
4
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
49 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

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

What drove the 49/100 rating

Risk Score Breakdown

  1. 01HIGHActive PAGA litigation in California alleging employee misclassification—core business model legal risk
  2. 02MEDNo Item 19 (average net income) disclosed—impossible to validate $109k-$346k investment ROI claims
  3. 03HIGHHistorical regulatory violations by predecessor entity regarding franchise disclosure fraud
  4. 04MINORRoyalty structure heavily penalizes growth (20% of initial fees for unit franchises creates perverse incentives)
  5. 05HIGH77 units with 22.6% YoY growth is modest for a 15-year-old system; growth rate doesn't offset litigation exposure

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.