Horsepower Brands is a multi-brand franchise platform that has acquired and launched seven franchise concepts in the home services sector — and SBA loan default data reveals a troubling pattern across nearly every one of them. At Lopes Law LLC, we have recovered over $83,000 for franchise owners without litigation, and the volume of inquiries we receive from distressed Horsepower Brands franchisees tells us that the problems behind these numbers are real, widespread, and accelerating.

This guide breaks down the SBA default data for every Horsepower Brands sub-brand, explains why multi-brand franchise platforms create unique risks for franchisees, and outlines the legal options available to franchise owners who are currently struggling or have already defaulted on an SBA loan tied to a Horsepower Brands franchise.

What Is Horsepower Brands and Why Should Franchise Buyers Pay Attention?

Horsepower Brands operates out of Omaha, Nebraska, and positions itself as a franchise platform — a holding company that acquires, develops, and scales multiple franchise concepts under a single corporate umbrella. The company’s portfolio includes seven franchise brands spanning window treatments, plumbing, fencing, glass installation, painting, roofing, and HVAC services.

The multi-brand platform model has become increasingly popular in franchising. The premise is that a shared corporate infrastructure — marketing, technology, training, supply chain — can be deployed across multiple brands more efficiently than each brand operating independently. In theory, franchisees benefit from the economies of scale that a larger parent company provides.

In practice, the SBA loan default data tells a different story. When a franchise platform acquires brands rapidly and spreads its corporate resources across seven distinct business models, the support systems that individual franchisees depend on can become dangerously thin. The data below suggests that this is exactly what has happened across the Horsepower Brands portfolio.

What Does the SBA Loan Default Data Show for Horsepower Brands?

SBA loan default data is one of the most objective measures of franchise system health because it tracks actual financial outcomes rather than franchisor-reported metrics. When a franchisee defaults on an SBA-backed loan, it typically means the business could not generate enough revenue to service its debt — a clear indicator that the franchise investment did not perform as expected.

Here is the SBA default data for all seven Horsepower Brands sub-brands:

The combined default rate across the Horsepower Brands portfolio of approximately 12.5% is roughly double the overall SBA franchise loan default average of 5% to 7%. Every single brand with sufficient data shows default rates above the industry average. This is not a case of one struggling brand pulling down an otherwise healthy portfolio — it is a systemic pattern.

What Are the Common Patterns Behind Horsepower Brands Franchise Failures?

Analyzing SBA default data alongside franchisee reports reveals several recurring patterns across the Horsepower Brands portfolio. These are not isolated incidents — they appear consistently across multiple sub-brands.

Rapid Brand Acquisition Without Adequate Integration

Horsepower Brands has expanded its portfolio through a combination of brand creation and brand acquisition. Growing from a single concept to seven franchise brands in a short period creates enormous operational demands. Each brand requires its own training curriculum, marketing playbook, vendor relationships, and operational support infrastructure. When the parent company scales faster than its ability to deliver on these requirements, franchisees feel the impact first.

Franchisees across multiple Horsepower Brands have reported delays in receiving marketing materials, inconsistent training quality, and difficulty reaching corporate support staff. These are hallmarks of a franchise platform that has outgrown its infrastructure.

Underdeveloped Support Systems for New Franchisees

The first 12 to 18 months of a franchise are the highest-risk period. New franchisees are learning the business model, building their customer base, hiring and training employees, and managing cash flow while the business ramps up. During this critical window, the quality of franchisor support — marketing assistance, operational guidance, vendor onboarding, lead generation — often determines whether the franchisee survives.

When a parent company is managing seven brands simultaneously, the depth of support available to any individual franchisee inevitably decreases. A dedicated brand with 100 franchisees and a focused corporate team will typically deliver better launch support than a multi-brand platform spreading the same resources across seven concepts and hundreds of franchisees.

Franchise Fee Revenue Prioritized Over Franchisee Success

Multi-brand franchise platforms generate revenue through initial franchise fees, ongoing royalties, and — in some cases — fees for ancillary services. The initial franchise fee creates a structural incentive to sell new franchise units. When the corporate revenue model depends on a high volume of new franchise sales across multiple brands, there can be a tension between the sales pace and the quality of franchisee selection and onboarding.

SBA default rates above 10% across nearly all brands suggest that either the franchisee selection process is not identifying candidates who are likely to succeed, or the support provided after the sale is insufficient to give qualified operators a realistic chance at profitability — or both.

How Do Multi-Brand Franchise Platforms Create Unique Risks for Franchisees?

If you are evaluating a franchise from any multi-brand platform — not just Horsepower Brands — you need to understand the structural risks that this business model creates for individual franchisees.

• Diluted corporate attention: A parent company managing seven brands will divide its leadership, marketing, and support resources across all seven. Your brand may not be the priority, especially if it is smaller or newer.
• Brand identity confusion: Multi-brand platforms sometimes struggle to build strong, distinct brand identities for each concept. If the parent company’s marketing team is creating campaigns for seven brands, the quality and specificity of your brand’s marketing may suffer.
• Cross-brand financial risk: If one brand in the portfolio experiences severe financial distress, it can affect the parent company’s ability to fund support for the other brands. A multi-brand platform is only as stable as its weakest brand if the corporate entity commingles resources.
• Restructuring and brand divestitures: Multi-brand platforms may decide to sell, discontinue, or restructure individual brands. If the parent company sells your brand to a new owner, your franchise relationship — and the quality of support you receive — can change dramatically without your consent.
• Inconsistent FDD disclosures: Each brand in a multi-brand platform has its own FDD, but the parent company’s financial health and operational decisions affect all of them. The FDD for your specific brand may not fully capture the risks created by the parent company’s overall portfolio strategy.

For a deeper understanding of what your franchise disclosure document should be telling you about these risks, see our guide on franchise dispute resolution options.

What Should You Look for in Your Sub-Brand’s FDD to Assess Parent Company Risk?

If you are an existing Horsepower Brands franchisee or evaluating one of their franchise opportunities, the FDD is your primary tool for assessing risk. Here is what to focus on:

Item 1: The Franchisor and Its Parents, Predecessors, and Affiliates

This section discloses the corporate structure behind your franchise brand. For a multi-brand platform like Horsepower Brands, pay close attention to the parent company’s organizational structure, whether the franchisor entity is a subsidiary of the platform, and whether the parent company guarantees any of the franchisor’s obligations. If the franchisor is a thinly capitalized subsidiary, the parent company’s financial health becomes critical — but may not be fully disclosed in your brand’s FDD.

Item 3: Litigation History

Item 3 discloses pending and recent litigation involving the franchisor and its principals. For multi-brand platforms, check the litigation history for the parent company’s executives, not just the specific brand entity. Patterns of litigation across multiple brands can indicate systemic problems with the franchisor’s business practices.

Item 19: Financial Performance Representations

If the FDD includes an Item 19 (which is optional), evaluate the financial performance data carefully. Ask whether the numbers reflect locations that have been open for a full year or longer, whether the data distinguishes between company-owned and franchisee-owned locations, and whether the presented averages or medians are skewed by a small number of high performers. When the SBA default rate for a brand exceeds 10%, the Item 19 data — if it exists — may not be telling the complete story of typical franchisee financial outcomes.

Item 20: System Size and Turnover

Item 20 provides the most direct indicator of franchise system health by disclosing how many units have opened, closed, transferred, or been terminated in the past three years. High turnover numbers — particularly a combination of terminations and closures — are consistent with the SBA default rates documented above and should be evaluated carefully.

What Rights Do Franchisees Have When a Parent Company Restructures or Sells Brands?

Multi-brand franchise platforms restructure regularly. They may sell individual brands, merge brands, bring in outside investors, or reallocate resources between brands based on performance. For franchisees, these corporate-level decisions can have significant consequences.

Your rights during a parent company restructuring depend on several factors:

• Change-of-control provisions: Some franchise agreements include provisions that give franchisees specific rights if the franchisor entity is sold or its controlling ownership changes. These may include the right to terminate the agreement, the right to consent to the transfer, or the right to receive specific assurances about continued support.
• Contractual support obligations: The franchisor’s obligations under the franchise agreement — training, marketing, operational support, territory protections — do not disappear because the parent company restructures. If a restructuring results in reduced support, that may constitute a breach of the franchise agreement.
• State franchise relationship laws: Several states have franchise relationship laws that provide additional protections against franchisor actions that unfairly harm franchisees. These laws may restrict the conditions under which a franchisor can terminate or refuse to renew a franchise, even during a restructuring.
• Implied covenant of good faith and fair dealing: Even where the franchise agreement does not explicitly address restructuring, the implied covenant of good faith requires the franchisor to act in a manner that does not deprive the franchisee of the benefit of the bargain. A restructuring that guts the support system the franchisee relied upon when signing the agreement may breach this duty.

At Lopes Law LLC, we advise franchisees to treat any announcement of a corporate restructuring, brand sale, or change in ownership as a trigger to immediately review their franchise agreement with a franchise attorney. The window for protecting your rights is often shorter than you expect.

What Recovery Options Exist for Distressed Franchisees in Horsepower Brands?

If you are currently operating a struggling Horsepower Brands franchise — or have already defaulted on an SBA loan — you have more options than you might think. The key is acting before your legal position deteriorates further.

Option 1: Franchise Dispute Review and Demand Process

The first step is a comprehensive review of your franchise agreement, FDD, and the specific circumstances of your dispute. A franchise dispute attorney can identify whether the franchisor has breached its obligations, whether the sales process involved material misrepresentations, and whether you have viable legal claims that can be used as leverage in a negotiation.

At Lopes Law LLC, we have recovered over $83,000 for franchise owners without litigation through strategic demand processes. A well-documented demand letter that identifies specific franchisor breaches and quantifies the franchisee’s damages can produce significant results — fee refunds, royalty abatements, release from non-compete provisions, or monetary settlements — without the cost and time of formal legal proceedings.

Option 2: SBA Loan Workout or Modification

If you are falling behind on SBA loan payments but have not yet defaulted, contact your lender immediately to discuss workout options. SBA lenders may be willing to modify loan terms, extend the repayment period, or agree to a temporary forbearance if you can demonstrate a realistic plan for recovery. Having a franchise attorney involved in these discussions can strengthen your position, especially if the franchisor’s actions contributed to your financial distress.

Option 3: Negotiated Exit From the Franchise

In some cases, the best outcome for a distressed franchisee is a negotiated exit that minimizes financial exposure. This may involve negotiating a release from the franchise agreement, the non-compete clause, and any personal guarantees. If the franchisor has breached the agreement, the franchisee’s leverage in these negotiations increases substantially.

Option 4: Formal Legal Action

When negotiation fails or the franchisor refuses to engage in good faith, formal legal action — through arbitration or litigation, depending on the franchise agreement’s dispute resolution clause — may be necessary. Claims may include fraud in the inducement, breach of contract, violation of the FTC Franchise Rule, and violations of state franchise laws. The recoverable damages can include the initial franchise fee, build-out costs, lost profits, SBA loan obligations, and other consequential damages.

For a complete overview of the dispute resolution process, see our franchise dispute resolution guide.

When Should You Contact a Franchise Dispute Attorney?

If any of the following apply to your situation, contact a franchise dispute attorney immediately:

• Your Horsepower Brands franchise is generating significantly less revenue than what was represented or projected during the sales process.
• The support, training, or marketing assistance you are receiving from corporate does not match what was disclosed in the FDD.
• You are falling behind on SBA loan payments or other financial obligations related to the franchise.
• The parent company has announced a restructuring, sale, or change in leadership that may affect your brand.
• You received a notice of default, termination, or non-renewal from the franchisor.
• You were told things during the sales process that turned out to be materially inaccurate after you opened the business.
• You want to exit the franchise but are concerned about non-compete restrictions, personal guarantees, or SBA loan obligations.

Time is the most important variable in franchise dispute cases. The sooner you engage a franchise attorney, the more legal tools are available to protect your interests and maximize your recovery.

How Does Lopes Law LLC Help Distressed Franchisees?

At Lopes Law LLC, we represent franchisees nationally in disputes with franchisors of all sizes — from single-brand systems to multi-brand platforms like Horsepower Brands. Our approach is straightforward and designed to minimize cost while maximizing results.

• Flat-fee dispute review ($3,000): We review your franchise agreement, FDD, and dispute circumstances. You receive a written analysis of your legal position, identification of franchisor breaches, assessment of potential damages, and strategic recommendations for next steps.
• Strategic demand and negotiation: If the dispute review identifies viable claims, we can pursue recovery through a formal demand process. This is where most franchise disputes are resolved — and where we have consistently achieved results for our clients.
• Litigation and arbitration representation: When negotiation fails, we represent franchisees in formal proceedings. Retainers typically range from $5,000 to $10,000+ depending on complexity.

We handle franchise disputes in English, Spanish, and Portuguese, and we serve clients in all 50 states from our offices in Philadelphia and Wyncote, Pennsylvania. For more information on our fee structure and approach, see our guide on how much a franchise lawyer costs.

Frequently Asked Questions About Horsepower Brands Franchise Failures

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Last updated: March 10, 2026