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A54/100FDD 2025
The Grout Medic — Litigation & Risk
Cleaning - Commercial & Janitorial · FDD Items 3, 4 & 5
Elevated Risk
17 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
17
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
54 / 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
14
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
Total loan volume
$3.7M
Avg loan size
$262K
Participating lenders
5
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
Virginia
State whose law governs disputes — relevant if you're not based there
What drove the 54/100 rating
Risk Score Breakdown
- 01HIGH17 pending or prior legal actions including franchisee fraud/breach of contract allegations and multiple state regulatory violations (Maryland, Illinois, California, Washington) for registration and disclosure violations
- 02MEDNo average net income disclosed in Item 19 despite $321,441 average revenue — inability or unwillingness to provide profitability data is a major transparency red flag
- 03MEDModest unit growth of 13.1% YoY with only 69 franchises suggests a small, fragile system vulnerable to churn; any departures could accelerate decline
- 04HIGHHigh litigation involving affiliated brands (360 Painting, Window Gang, Rooterman) under same parent entity indicates systemic legal and compliance issues across portfolio
- 05MINORPrior governmental enforcement actions for registration/disclosure violations suggest history of inadequate franchise disclosure practices
- 06MEDHigh franchise fee ($65,000) and 6% royalty combined with undisclosed profitability creates significant financial risk for franchisees with unclear ROI
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.