B61/100FDD 2026
The Tailored Closet — Litigation & Risk
Home Services - Other · FDD Items 3, 4 & 5
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
61 / 100
FranchiseVerdict composite
Rating
MODERATE
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
1
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
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
California
State whose law governs disputes — relevant if you're not based there
What drove the 61/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 5.6% YoY (136 units) — indicates system contraction and potential market saturation or franchisee struggles
- 02MEDNet income not disclosed in Item 19 — cannot assess actual profitability; average revenue of $506,934 means little without expense breakdown
- 03HIGHAffiliate litigation in 2006 (Aussie Pet Mobile) shows parent company history of franchise law violations and SEC enforcement actions
- 04MINORHigh royalty floor of $1,000/month ($12,000/year) starting year 2 creates cash flow pressure regardless of sales performance
- 05MINOR10-year term with protected territory is positive, but declining unit count suggests territory protection may not guarantee success
- 06MINORFranchise fee of $19,950 combined with $177,130–$270,650 total investment requires $197,080–$290,600 capital outlay with unproven 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.