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A35/100FDD 2025

Wise Coatings — Litigation & Risk

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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
35 / 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
7
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$948K
Avg loan size
$135K
Participating lenders
4

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

What drove the 35/100 rating

Risk Score Breakdown

  1. 01MINORRoyalty structure with $1,500–$3,000 monthly minimums creates high fixed costs ($18,000–$36,000 annually) that exceed 5% revenue share for locations generating under $360,000–$720,000
  2. 02MINOR62.5% YoY unit growth is exceptionally rapid and difficult to sustain; typical healthy growth is 10–20%; suggests possible aggressive recruitment over retention
  3. 03MINORSmall system size (27 units) increases vulnerability to key franchisee exits and market concentration risk
  4. 04MEDNo Item 19 financial performance representations disclosed; reliance on 'average' figures ($375K revenue, $105K net income) lacks transparency on median, range, or survival rates
  5. 05HIGHLimited litigation disclosure history for rapidly expanding system; insufficient track record to assess franchisor support quality and dispute resolution patterns

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.