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A43/100FDD 2025

The Grout Doctor® — Litigation & Risk

Other · FDD Items 3, 4 & 5

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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
43 / 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
Governing law
Utah
State whose law governs disputes — relevant if you're not based there

What drove the 43/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-1.2% YoY) suggests system contraction and potential franchisee satisfaction issues
  2. 02MEDNo average net income disclosed prevents assessment of actual profitability and ROI despite $158k average revenue
  3. 03MINORTiered royalty structure with 9% floor on low-volume sales (up to $8k) creates high effective rates for underperforming locations
  4. 04HIGHGoing Concern status is 'False' — ambiguous wording; requires clarification if franchisor faces financial instability
  5. 05MINORLow franchise fee ($15k) relative to startup cost ($23.7k-$37.8k) suggests high ongoing royalty dependence for franchisor revenue
  6. 06HIGHNo litigation disclosed but declining units + profit opacity raises red flags about franchisee disputes being underreported

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.