A39/100FDD 2024
Top Rail Fence — Litigation & Risk
Home Services - Other · FDD Items 3, 4 & 5
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
39 / 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
23
Government-backed loans issued
Default rate
—
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
$162K
Participating lenders
6
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
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 39/100 rating
Risk Score Breakdown
- 01MINORExplosive 342.9% YoY unit growth is unsustainable and suggests potential quality control issues, franchisee satisfaction concerns, or aggressive recruitment masking underlying problems
- 02MINORHigh initial investment ($112,944-$213,444) combined with 7% royalty on relatively modest average revenue ($943,783) creates tight margin pressure with breakeven concerns
- 03MINORNet income averaging only $126,073 (13.4% net margin) means franchisees take home minimal profit after royalties, taxes, and operating expenses in many cases
- 04MINORFranchise fee of $59,900 represents 53-63% of minimum initial investment, indicating heavy reliance on front-loaded revenue rather than ongoing system support
- 05MEDLack of disclosed Item 19 financial performance data prevents independent verification of claimed average revenue and income figures
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.