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B63/100FDD 2024

USA Insulation — Litigation & Risk

Home Services - 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
63 / 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
39
Government-backed loans issued
Default rate
8.3%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$10.2M
Avg loan size
$261K
Participating lenders
14

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
Ohio
State whose law governs disputes — relevant if you're not based there

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 financial performance data disclosed — impossible to validate ROI claims or benchmark profitability
  2. 02MINORAggressive unit growth (69.5% YoY) suggests rapid expansion with unclear unit quality/sustainability
  3. 03MINORRoyalty floor of $1,000/month ($12,000 annually) creates break-even pressure for low-revenue locations
  4. 04MEDHigh initial investment ($265.5K–$410K) with no disclosed average net income creates profitability uncertainty
  5. 05MED101-unit system remains relatively small with limited brand recognition — fewer peer benchmarks and less operational maturity
  6. 06MINOR10-year term is longer than industry standard (typically 5–7 years), locking franchisees into dated economics

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.