B65/100FDD 2025
Wine & Design — Litigation & Risk
Home Services - Painting · FDD Items 3, 4 & 5
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
65 / 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
9
Government-backed loans issued
Default rate
28.6%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$1.0M
Avg loan size
$114K
Participating lenders
8
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 65/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 2.0% YoY (49 units) suggests market contraction or franchisee attrition
- 02MEDNo Item 19 financial performance data disclosed — cannot validate profitability claims or ROI
- 03HIGHTwo concluded litigations including breach of contract and failure to provide disclosures indicate franchisor compliance issues
- 04MEDHigh initial investment range ($69,950–$271,700) with 6% royalty burden and no disclosed average revenue benchmarks creates visibility gap
- 05MED10-year term with protected territory offers limited flexibility if profitability targets unmet
- 06HIGHLitigation involving 'failure to provide disclosures' raises concerns about FDD transparency and franchisor accountability
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.