FranchiseVerdict
THE GROUNDS GUYS logo
F79/100FDD 2024

The Grounds Guys — Litigation & Risk

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

Back to overview

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
79 / 100
FranchiseVerdict composite
Rating
AVOID
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
232
Government-backed loans issued
Default rate
41.8%
vs <3% typical · system-wide
5-yr default rate
32.1%
Defaults
38 loans
Loans charged off or defaulted
Total loan volume
$39.8M
Avg loan size
$172K
Participating lenders
28

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 79/100 rating

Risk Score Breakdown

  1. 01HIGHActive litigation involving fraud, misrepresentation, and breach of contract claims from multiple franchisees suggests systemic operational or disclosure issues
  2. 02MEDNo average net income disclosed despite $811K average revenue — opacity on actual profitability raises questions about sustainability at lower end of investment spectrum
  3. 03MINORSlow unit growth of only 6.6% YoY with 225 total units indicates market saturation or franchisee satisfaction issues in an established 10-year system
  4. 04HIGHHigh litigation frequency (4 disclosed cases with franchisees as plaintiffs) in a relatively small 225-unit system signals disproportionate conflict rate
  5. 05MINORProtected territory alone cannot offset lack of profitability transparency and breach of contract allegations

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.