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A50/100FDD 2025

Vanguard Cleaning Systems — Litigation & Risk

Cleaning - Commercial & Janitorial · FDD Items 3, 4 & 5

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
50 / 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
1
Government-backed loans issued
Default rate
100.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$50K
Avg loan size
$50K
Participating lenders
1

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

What drove the 50/100 rating

Risk Score Breakdown

  1. 01MEDSignificant unit decline of 8.6% year-over-year (2,011 units) indicating system contraction and potential franchisee dissatisfaction
  2. 02MINORThree separate misclassification lawsuits across multiple states (Illinois, California, Massachusetts) with one settled for $559,450, suggesting systemic classification issues
  3. 03MEDNo average revenue or net income disclosure (missing Item 19) making it impossible to validate return on $6,280-$27,995 investment
  4. 04MINORUnprotected territory creates direct competition risk between franchisees and no exclusivity guarantee
  5. 05HIGHPending class action litigation in California (Mazariegos) and ongoing Illinois administrative appeal represent material ongoing legal exposure
  6. 06HIGHGoing Concern status is False, indicating potential financial viability concerns at corporate level

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.