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D72/100FDD 2024

United Real Estate — Litigation & Risk

Real Estate · FDD Items 3, 4 & 5

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Moderate — Review

5 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
2
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
$953K
Avg loan size
$477K
Participating lenders
0

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
1 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 72/100 rating

Risk Score Breakdown

  1. 01MINORSystem contracting: 90 units declining 1.4% YoY indicates stagnant/negative growth trajectory
  2. 02MINORFive concurrent putative class action lawsuits alleging antitrust violations create existential legal/reputational risk
  3. 03MEDNo Item 19 financial disclosure (Avg Revenue/Net Income not disclosed) prevents ROI validation and suggests weak unit economics
  4. 04MINORNo protected territory exposes franchisees to internal competition and cannibalization
  5. 05MINORMonthly per-agent fees ($45) plus transaction fees ($75 buy/sell, $45 lease) create variable cost structure dependent on agent productivity
  6. 06HIGH10-year term is long-duration commitment in litigation-exposed system with declining unit count

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.