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B66/100FDD 2024

VetCor — Litigation & Risk

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

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 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
2
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
$310K
Avg loan size
$155K
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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 66/100 rating

Risk Score Breakdown

  1. 01MINORUnit count collapsed 45.5% YoY (15 units remaining) indicating severe system contraction and franchisee failure rate
  2. 02HIGHPending litigation alleging misrepresentation, fraud, and failure to provide training directly threatens franchisor credibility
  3. 03MEDNet income not disclosed despite $599k average revenue — lack of transparency on actual profitability suggests poor unit economics
  4. 04MINORDual royalty structure (4-7%) combined with $60k franchise fee and $173-400k investment creates high break-even threshold
  5. 05HIGHGoing concern flag indicates financial viability questions at corporate level
  6. 06MINORResolved lawsuit involving breach and non-compete suggests contentious franchisor-franchisee relationship history
  7. 07MINORNo Item 19 (financial performance representations) limits ability to validate revenue claims

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.