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A43/100FDD 2026

Zerorez — 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
43 / 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
8
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$6.5M
Avg loan size
$811K
Participating lenders
7

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
1.5 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
Utah
State whose law governs disputes — relevant if you're not based there

What drove the 43/100 rating

Risk Score Breakdown

  1. 01MINORSlow unit growth of 5.3% YoY suggests market saturation or recruitment challenges in a 82-unit system
  2. 02MEDNo Item 19 (Financial Performance Representations) disclosed—cannot independently verify the $550,688 average net income claim
  3. 03HIGHTwo litigation events including 2024 arbitration with regional developer and historical 2011 regulatory compliance failure indicate franchisor-franchisee relationship strain
  4. 04MINORHigh initial investment range ($218K–$411K) with 6% royalty against modest unit growth raises ROI sustainability concerns
  5. 05HIGHFalse 'Going Concern' status is unusual in FDD context and warrants clarification on financial health

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.