Empower Brands is a multi-brand franchise holding company that controls several home services and commercial cleaning concepts, including Jan-Pro, Superior Fence and Rail, Koala Insulation, Bumble Roofing, Outdoor Lighting Perspectives, Archadeck Outdoor Living, and Coserva Irrigation. SBA loan default data across these brands reveals a pattern that prospective and current franchisees need to understand before investing capital or continuing operations. At Lopes Law LLC, we have recovered over $83,000 for franchise owners without litigation, and the patterns we see in the Empower Brands portfolio are consistent with the kinds of systemic issues that give rise to franchisee claims.

This guide breaks down the SBA default data for each Empower Brands sub-brand, explains Jan-Pro’s specific legal controversies, examines the risks of investing in a multi-brand franchise platform, and outlines the legal options available to franchisees who are struggling or have already lost their investment.

What Is Empower Brands and How Is It Structured?

Empower Brands operates as a holding company that acquires and manages franchise concepts, primarily in the home services sector. The company’s strategy follows the private-equity-backed franchise aggregation model: buy established or emerging franchise brands, centralize corporate functions, and scale through franchisee expansion.

The portfolio spans commercial cleaning (Jan-Pro), fencing (Superior Fence and Rail), insulation (Koala Insulation), roofing (Bumble Roofing), outdoor lighting (Outdoor Lighting Perspectives), outdoor living structures (Archadeck Outdoor Living), and irrigation services (Coserva Irrigation). Each brand issues its own Franchise Disclosure Document and operates under its own franchise agreement, but the corporate infrastructure, training programs, and support systems are managed by the parent company.

For franchisees, this structure creates a critical question: does the holding company model improve operational support, or does it dilute resources across too many brands? The SBA default data suggests the answer is not favorable for franchisees.

What Do the SBA Loan Default Numbers Show for Empower Brands?

The U.S. Small Business Administration tracks loan performance for franchise systems. When franchisees take SBA-backed loans and subsequently default, those defaults are recorded against the franchise brand. High default rates relative to peers in the same industry segment indicate systemic problems with the franchise model, the support provided, or the economics of the opportunity as presented to franchisees.

Here is the SBA default data for each Empower Brands sub-brand:

For context, the SBA’s overall franchise loan default average is approximately 5.2%. Every Empower Brands sub-brand with sufficient data has a default rate roughly double that average. When five out of five measurable brands in a single portfolio exceed the industry norm, the pattern points to something beyond individual franchisee mistakes.

What Are the Jan-Pro Franchise Controversies?

Jan-Pro is the most established brand in the Empower Brands portfolio, and it also carries the most significant legal baggage. The core controversy centers on worker misclassification: whether Jan-Pro franchisees are truly independent business owners or whether the franchise structure functions as a mechanism to classify employees as independent contractors.

The Misclassification Lawsuits

Multiple lawsuits in states including Massachusetts, California, and New Jersey have challenged Jan-Pro’s franchise model on misclassification grounds. The central argument is that Jan-Pro exercises such extensive control over its franchisees, including setting cleaning rates, assigning customer accounts, dictating work schedules, requiring specific equipment and supplies, and controlling the billing and payment process, that the franchisees are functionally employees rather than independent business owners.

In Massachusetts, the state’s Supreme Judicial Court examined Jan-Pro’s operations under the state’s independent contractor statute, which uses a three-prong “ABC test.” Under this test, a worker is presumed to be an employee unless the hiring entity can prove all three of the following: (A) the worker is free from the company’s control, (B) the work is performed outside the company’s usual business, and (C) the worker has an independently established trade or business. Jan-Pro had difficulty satisfying these requirements given the degree of control it exercised over franchisee operations.

The implications for current and former Jan-Pro franchisees are significant. If a court determines that franchisees were misclassified, those individuals may be entitled to employee protections including minimum wage guarantees, overtime pay, workers’ compensation benefits, and unemployment insurance. For more on understanding your legal standing in a franchise dispute, see our guide on franchise dispute resolution options.

The Franchisee-vs-Employee Debate

The Jan-Pro model highlights a broader tension in the cleaning franchise industry. Many commercial cleaning franchises sell what they describe as a “turnkey business opportunity” with a relatively low initial investment. The franchisee pays a fee, receives training, and is assigned customer accounts.

However, when the franchisor controls account assignments, sets pricing, handles billing, deducts royalties directly from payments before passing the remainder to the franchisee, and can reassign accounts at will, the franchisee’s actual autonomy is limited. The question courts are asking is whether this level of control crosses the line from a legitimate franchise relationship into a de facto employment relationship dressed up as entrepreneurship.

For prospective franchisees evaluating Jan-Pro or similar cleaning franchise opportunities, this legal uncertainty represents a material risk. If the misclassification challenges succeed in additional jurisdictions, the entire franchise model could be restructured, and current franchisees could find their agreements and territories fundamentally altered.

Why Are Multi-Brand Franchise Holding Companies Risky for Franchisees?

Empower Brands is part of a broader trend of private equity and holding company acquisitions of franchise systems. While these acquisitions are often marketed as bringing “resources and expertise” to franchise brands, the reality for franchisees is frequently the opposite.

• Diluted support resources: When a holding company operates seven franchise brands simultaneously, the corporate team’s attention and resources are divided. Training programs, marketing support, technology development, and field support must serve multiple brands. Franchisees who signed up for one brand’s support promises may find that the actual support they receive declines after the brand is folded into a larger portfolio.
• Cross-brand profit extraction: Holding companies may use profits generated by successful brands to subsidize underperforming ones or to fund new acquisitions. Franchisees in the profitable brands bear this cost indirectly through reduced reinvestment in their system.
• Management turnover: Acquisitions frequently lead to changes in brand leadership. The people who built the franchise system and understood its franchisees may be replaced by holding company executives whose primary focus is financial performance metrics rather than franchisee success.
• Standardization over customization: Holding companies often push to standardize operations across brands to reduce costs. This can mean that the specific industry knowledge and tailored support that made a brand attractive to franchisees gets replaced by generic corporate processes.
• Increased fee pressure: Holding companies need returns on their acquisition investments. This can translate to increased royalty rates, new technology fees, mandatory vendor changes, or other cost increases that squeeze franchisee margins.

The SBA default data for Empower Brands suggests that these theoretical risks are manifesting as real financial consequences for franchisees across the portfolio. For a deeper understanding of the warning signs in franchise agreements, read our analysis of franchise agreement red flags to watch for.

What SBA Default Patterns Should You Look for by Sub-Brand?

Superior Fence and Rail: 5 Defaults, 11.1% Rate

Superior Fence and Rail has the highest number of absolute SBA defaults in the Empower Brands portfolio with 5 recorded defaults and an 11.1% default rate. The fencing industry is competitive and margins are often thin. Franchisees in this concept need to evaluate whether the royalty and fee structure allows for sustainable profitability in their local market, particularly given the capital-intensive nature of inventory, equipment, and crew costs.

Bumble Roofing: 3 Defaults, 13.6% Rate

Bumble Roofing has the highest default rate in the portfolio at 13.6%. While the absolute number of defaults (3) is lower, the percentage is concerning because it means roughly 1 in 7 SBA-backed franchisees in this system defaulted on their loans. Roofing is a highly seasonal, weather-dependent business with significant liability exposure, and the franchise model must account for these realities in its training, insurance, and financial projections.

Archadeck Outdoor Living: 4 Defaults, 11.4% Rate

Archadeck is one of the more established brands in the portfolio, focused on decks, patios, and outdoor structures. Despite its longer track record, the 11.4% default rate suggests that brand maturity alone does not insulate franchisees from economic struggles. The construction industry’s labor shortages, material cost volatility, and permitting complexities all contribute to operational challenges that the franchise support system must address.

Koala Insulation: 4 Defaults, 10.5% Rate

Koala Insulation is a newer concept in the home services space. With 4 defaults and a 10.5% rate, the data suggests that the franchise model may not yet be mature enough to consistently deliver the economics presented during the sales process. Emerging franchise brands inherently carry more risk because their operating model has not been tested across diverse markets and economic conditions.

Outdoor Lighting Perspectives: 3 Defaults, 10.0% Rate

Outdoor Lighting Perspectives has 3 SBA defaults at a 10.0% rate. This is a niche concept with a narrow service offering, which means franchisees are heavily dependent on the local market’s appetite for outdoor lighting services. Seasonality and discretionary spending patterns can significantly impact revenue in this segment.

What Legal Rights Do Empower Brands Franchisees Have?

If you are a current or former franchisee of any Empower Brands concept and your business has failed or is struggling, you may have legal claims against the franchisor depending on the specific circumstances. Here are the most common legal theories that apply:

• Fraudulent misrepresentation: If the franchisor or its sales representatives made earnings claims, financial projections, or statements about expected profitability that did not match reality, you may have a claim for fraud. This includes informal statements made during the sales process that were not included in the FDD, sometimes called “earnings claims outside the FDD.”
• Breach of contract: If the franchisor failed to deliver the training, marketing support, operational guidance, or other obligations specified in the franchise agreement, that failure may constitute a breach of contract. Review your franchise agreement with an attorney to identify every obligation the franchisor undertook.
• State franchise law violations: Many states have franchise-specific statutes that impose disclosure requirements, registration obligations, and good faith dealing standards beyond what federal law requires. Violations of these state laws can give rise to independent claims with statutory remedies including attorney’s fees and, in some states, treble damages.
• FDD disclosure deficiencies: If the FDD omitted material information, contained misleading data, or failed to disclose known risks, the franchisor may have violated the FTC Franchise Rule (16 C.F.R. Part 436) or state registration requirements.
• Violation of the implied covenant of good faith: Even where the franchise agreement gives the franchisor broad discretion, the implied covenant of good faith and fair dealing requires that the franchisor exercise that discretion reasonably and not in a way that destroys the franchisee’s ability to earn the benefit of the contract.

At Lopes Law LLC, we evaluate each of these theories during our franchise dispute review. Many of our clients are surprised to learn that their franchisor’s conduct, while perhaps not overtly illegal, crosses legal lines when examined through the lens of state franchise statutes and common law fraud standards.

What Recovery Options Exist for Franchisees Who Have Lost Money?

Recovery for franchisees who have lost money in an Empower Brands concept typically follows one of these paths:

• Demand letter and negotiated settlement: A well-crafted demand letter from a franchise attorney that identifies specific legal violations and quantifies damages often produces a negotiated resolution without the cost and time of formal proceedings. At Lopes Law LLC, we have recovered over $83,000 for franchise owners through this approach alone.
• Franchise agreement renegotiation: For franchisees still operating, an attorney can negotiate modifications to the franchise agreement, including reduced royalties, extended payment terms, territory adjustments, or early termination with reduced or eliminated post-termination restrictions.
• Arbitration: Most franchise agreements require disputes to be resolved through binding arbitration rather than court litigation. While this limits some options, arbitration can be faster and less expensive than trial court proceedings. Your attorney should review the arbitration clause carefully to understand the rules, venue, and cost allocation.
• State regulatory complaints: Filing complaints with state franchise regulators (such as the California Department of Financial Protection and Innovation or the Maryland Office of the Attorney General) can trigger investigations that benefit multiple franchisees, not just the complainant.
• Class or collective actions: In some cases, particularly where the same misrepresentations or contractual failures affect many franchisees in the system, collective legal action may be appropriate. Jan-Pro’s misclassification lawsuits are an example of this approach.

The right strategy depends on the specific facts of your situation, the terms of your franchise agreement, and the state laws that apply to your franchise relationship. Do not assume that because the franchise agreement appears to favor the franchisor, you have no options. Franchise-specific statutes in many states override unfavorable contract terms and provide remedies that the franchise agreement itself does not acknowledge.

What Should You Do Before Investing in an Empower Brands Franchise?

If you are currently evaluating any Empower Brands concept, take these specific steps before committing capital:

• Review the SBA default data: The default rates documented in this article are publicly available. Compare them to industry averages and to competing franchise systems in the same sector.
• Conduct thorough validation: Contact current and former franchisees listed in Item 20 of the FDD. Ask specifically about the support they have received since Empower Brands took ownership of the brand, and whether the economics of the opportunity match what was presented during the sales process.
• Get an independent FDD review: Have a franchise attorney review the complete FDD, with particular attention to Item 19 (financial performance representations), Item 6 (ongoing fees), Item 17 (renewal, termination, and transfer), and Item 21 (financial statements). Do not rely on the franchisor’s summary or the franchise broker’s pitch.
• Model realistic economics: Build a financial model that accounts for every fee in Item 6, realistic revenue ramp-up timelines, local market competition, and the cost of the labor, materials, and equipment your specific concept requires.
• Understand the arbitration clause: Know in advance where disputes will be resolved, under what rules, and who pays the arbitration costs. Many franchisees discover these details only after a dispute arises, when the unfavorable terms limit their options.

For a complete walkthrough of the franchise evaluation process, see our guide on whether you need a lawyer to buy a franchise.

Frequently Asked Questions About Empower Brands Franchise Failures

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Last updated: March 10, 2026