FranchiseVerdict
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A45/100FDD 2024

The Decor Group / Christmas Decor — Litigation & Risk

Home Services - Lawn & Landscaping · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
45 / 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
13
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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 45/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential financial viability issues at corporate level
  2. 02HIGHActive litigation (2023) involving breach of franchise agreement, misappropriation of confidential information, and interference with business — suggests enforcement challenges and IP protection concerns
  3. 03MEDNet Income not disclosed in FDD Item 19 — inability to verify profitability claims despite $418,607 average revenue figure
  4. 04MINORUnit count stagnant at 240 with unknown growth trajectory — no clarity on system expansion or contraction momentum
  5. 05MINORHigh investment-to-revenue ratio (up to 31% of first-year revenue) with 5% royalty plus unknown marketing fund — potential cash flow compression
  6. 06MINORSeasonal business model (Christmas Decor) creates inherent revenue concentration risk and working capital challenges

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.