A36/100FDD 2025
That 1 Painter — Litigation & Risk
Home Services - Painting · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
36 / 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
39
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$8.0M
Avg loan size
$206K
Participating lenders
8
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 36/100 rating
Risk Score Breakdown
- 01MEDNo average net income disclosed — unable to calculate ROI or validate profitability claims against $113k-$189k investment
- 02MINORExplosive unit growth of 327% YoY raises sustainability concerns — typical healthy franchise growth is 15-25% annually; this suggests either aggressive recruitment or recent market entry without track record
- 03HIGHGoing concern status is FALSE — indicates potential financial instability or going concern doubt in franchisor's own financials
- 04MINORMinimum royalty of $461/week ($23,972/year) creates fixed cost burden regardless of revenue, problematic if franchisee generates less than $377k annually (6% breakeven)
- 05MEDFranchise fee of $59k represents 52% of minimum investment — high upfront cost for unproven brand with limited historical data
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.