From the filed FDD — automated extraction, check the source
2026 FDD
System 4
Commercial janitorial & hygiene · parent company: not identified
System4 is a commercial cleaning and facility services management franchise. A franchisee operates a regional office that sells janitorial and facility-maintenance contracts to businesses and coordinates a network of service providers to fulfill them.
System 4 net unit count grew 10.5% over 2023–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. Most numbers on this page come from that document; others come from federal SBA loan records and labor and census data, each labelled with its source:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened, transferred and left the system, the main basis for our verdict, which rates how strong the disclosed record is, or says when the system is too new, the filing too old, or the disclosure too thin to judge.
Our rating · opinion
Strong disclosed record
Enough units and history to judge, and the operating record is good. Units grew 11% (2023–2025: 57 → 63); the fiscal 2025 exit rate was 0.0%, below the 2.6% median across 10 comparable systems (commercial janitorial & hygiene).
Exit rate · fiscal 2025
0.0%
vs 2.6% median across 10 comparable systems (commercial janitorial & hygiene)
Cost to open
$128K–$377K
Item 7 total investment range
SBA loan losses
Too few to rate
13 seasoned resolved loans; 30 needed
Market density · Florida
Dense market
33% denser than the national average
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Data as of 2026-10-29. Figures come from System 4's public FDD filings (latest: MN 2026, extracted 2026-07-29) and SBA FOIA loan records (through FY2026), extracted by us and possibly containing errors. The rating is our opinion, not investment, legal, or tax advice. Franchisor or owner and see something wrong? Report a correction — we review every request.
Where the sources disagree
FDD record · SBA loans · model · auditor
The model's prediction differs from the operating record; with too few seasoned loans to check either, the verdict follows the disclosed record.
FDD record · Item 20
Strong operating record
Units grew 11% (2023–2025: 57 → 63); exit rate 0.0% (fiscal 2025) vs 2.6% median.
SBA loans · vs same-year loans
Too few seasoned loans
13 resolved loans approved by FY2020; 30 needed.
Modeled risk
Elevated
Directional only — too few seasoned loans to check it.
Auditor opinion · Item 21
Clean opinion
Unqualified audit, 2026 FDD. Says nothing about franchisee results.
Behind the verdict
the record, factor by factor · Item 20
latest consecutive years · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness · shown, not counted in the verdict
Systemwide units
2023–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 0 of 60 franchised outlets left the system — an exit rate of 0.0% (fiscal 2025), vs a 2.6% median across 10 comparable systems (commercial janitorial & hygiene). An exit is not a failure: this counts terminations, non-renewals and "ceased — other reasons" as reported, and excludes transfers to new owners.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Outlets at start | 58 | 57 | 61 |
| Opened | 2 | 2 | 2 |
| Transfers | 3 | 1 | 2 |
| Terminations | 1 | 0 | 0 |
| Non-renewals | 0 | 0 | 0 |
| Reacquired by franchisor | 0 | 0 | 1 |
| Ceased — other reasons | 0 | 0 | 0 |
| Outlets at end | 57 | 61 | 63 |
| Net change | -1 | +4 | +2 |
The franchisor's own finances
FDD ITEM 21 · AUDITED STATEMENTS · 2026 FDD
Cunningham & Associates, CPAs gave an unmodified (clean) opinion on the statements in the 2026 FDD; revenue fell 3% from FY2023 to FY2025.
This is the company selling the franchise, not any franchisee. A clean opinion means the statements are fairly presented — not that the business is healthy.
Audit opinion
Unmodified (clean) opinion
Cunningham & Associates, CPAs
Revenue · FY2025
$17.8M
extracted · not cross-checked
Net income · FY2025
$1.0M
extracted · not cross-checked
Where FY2025 revenue came from
22% royalties
initial-fee share not extracted
Show the statement figures ↓Hide the evidence ↑
| Fiscal year | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Total revenue | $18.3Mextracted · not cross-checked | $21.1Mextracted · not cross-checked | $17.8Mextracted · not cross-checked |
| Royalty revenue | $3.5Mextracted · not cross-checked | $3.9Mextracted · not cross-checked | $3.9Mextracted · not cross-checked |
| Net income (loss) | $454Kextracted · not cross-checked | $554Kextracted · not cross-checked | $1.0Mextracted · not cross-checked |
The lender's view
SBA 7(a)/504 loan outcomes · compared with franchise loans of the same years
Banks have made 35 SBA-backed loans to System 4 franchisees since 2016. Only 13 of its loans approved by FY2020 have resolved — fewer than the 30 we need to compare it fairly with other franchise loans, so we don't rate it.
All-time, 0 of 13 resolved loans charged off (0.0%). That raw figure mixes every approval year since 2016 — loans made in 2006–08 failed at several times the rate of loans made in 2010–13 across all franchises — so it is shown as evidence, not as the score. 63% of the brand's loans have not resolved yet.
—
13 seasoned resolved · 30 needed
0.0%
0 of 13 resolved, every approval year
—
charged-off $ ÷ approved $, defaulted loans
$911,680
what recent franchisees borrowed
—
shown with 10+ defaults
6 vs 5
distinct banks still lending
Charge-off rate by loan approval year (%) · dashed line = all franchise loans that year
Loan performance by state
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO SYSTEM 4 BY SBA FRANCHISE NAME/CODE · RESOLVED = CHARGED-OFF + PAID-IN-FULL · EXPECTED = SAME-YEAR RATE ACROSS ALL SBA FRANCHISE LOANS, LOANS ≥ ~6 YEARS OLD
The owner's side of the deal
FDD × federal loan record
Who finances it
Stearns Bank National Association
25.7% of this brand's loans
That lender charges off 12.2% of its resolved SBA loans to other franchise brands in the FOIA file, vs 14.8% nationally — a read on that lender's portfolio mix, not a finding about the bank.
Who buys it
75.8%
borrowers with no other franchise SBA loan on record
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators have charged off less often than brands sold mostly to newcomers (see methodology).
Does experience help here?
Not enough resolved loans to split
Computed from 35 SBA 7(a)/504 loans matched to System 4 by SBA franchise code in the SBA FOIA file. Debt service assumes level amortization at the average disclosed term and rate. Owner-level splits rely on borrower-name matching and may misclassify. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $96,000 franchise fee (Item 5) and a total investment of $128K–$377K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$128K–$377K
all-in investment range
Franchise fee (Item 5)
$96,000
upfront, one-time
Royalty (Item 6)
See Item 6
not a single flat % — read the fee table
This is not profit. It covers what the FDD fixes: what you put in, and the royalty you owe on sales. Your take-home depends on labor, vehicles, supplies, insurance, and the months to breakeven, none of which the FDD fixes for your unit (some Item 19s include cost data — read it).
Build a real pro-forma for System 4 with a buyer-paid CPAHow the earnings claim is built
FDD ITEM 19 · BASIS · 2026 FDD
This filing makes an Item 19 earnings claim; we have not yet read how it is built. Open Item 19 and check which units it covers, which it leaves out, and whether it shows costs.
Show the basis ↓Hide the evidence ↑
Labor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 4 wage cases against operators of this system, recovering $7K in back wages for 7 workers, including 1 child-labor case. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
4
Back wages owed
$7K
Employees affected
7
Since 2020
0
1 of these cases involved child-labor violations, covering 4 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual System 4 franchisees — separately owned businesses operating under the brand name — not System 4 itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Cases are matched to the brand by trade name and may include misattributed employers. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2014.
Modeled risk
FDD Risk Score · a prediction from disclosure and loan-file features
The model puts this brand in its elevated band — but this brand has too few seasoned SBA loans to check the score against, so read it as a band, not a number.
Risk percentile
Elevated
Directional · no point estimate
Modeled · vs same-year loans
band only
too few seasoned loans to check
Top drivers: Share financed by high-loss lenders (raises) · Item 20 exit rate (lowers) · System size (log units) (raises) · Item 3 litigation (log) (lowers). Too few seasoned SBA loans to check the score — read it as a band. A linear scorecard trained on brands' vintage-adjusted SBA loss records; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Public records
Bankruptcy, closure & federal court records · coverage is selective · dockets are not scored
We have no verified public-record signals published for System 4. This is not evidence that no events exist. Check PACER, the FDD's Item 3 (litigation) and Item 4 (bankruptcy), and recent news yourself.
8 questions to ask a System 4 franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These questions come from what System 4 has disclosed. Each one carries the number it came from, so you can check the answer against the record.
- 01
2 units transferred to new owners in fiscal 2025. When you look at those, were they people cashing out a good business — or getting out of a bad one?
Item 20 counts transfers as neutral, but a transfer can be a good sale or a reluctant exit — the filing does not say which.
FDD Item 20 · FY2025
- 02
Item 7 puts the cost to open at $128K–$377K, yet the average recent SBA loan to System 4 franchisees was $912K — above the whole range. What did those loans pay for: new units, resales, real estate, several units at once? And what did you actually spend to open, all in?
A loan above the disclosed range can mean buyers routinely overspend Item 7, or that SBA money in this system funds resales, property or multi-unit deals. The filing doesn't say which; an owner can.
FDD Item 7 vs SBA approvals FY2020+
- 03
System 4 makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2026
- 04
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 05
Item 3 discloses 11 legal matters. Do you know what those were about, and were any brought by franchisees?
Franchisee-brought suits over territory, fees or support tell you how the franchisor behaves when there's a disagreement.
FDD Item 3 · 2026
- 06
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 07
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 08
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
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A broker is usually paid by the franchisor to place you. I'm paid only by you, never by a franchisor you're considering — and the job is pressure-testing System 4’s numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Franchisors: send corrections with the page reference and we will review them against the filing and update or annotate the page. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
System 4 franchise questions, answered from the filings
How many System 4 franchised outlets left the system last year?
In System 4's latest FDD Item 20 (fiscal 2025), 0 of 60 franchised outlets left the system — an exit rate of 0.0% — compared with a 2.6% median across 10 comparable systems (commercial janitorial & hygiene) tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons" as the franchisor reported them; it excludes transfers to new owners. The FDD does not say why each outlet left, and an exit is not the same as a failure.
How much does a System 4 franchise cost?
Per System 4's 2026 FDD, buying in requires an initial franchise fee of $96,000 (Item 5) and a total initial investment of $128K–$377K (Item 7).
Does System 4 disclose earnings (Item 19)?
Yes — System 4 makes a financial performance representation in Item 19 of its 2026 FDD. Read it closely: franchisors choose which units and which metrics to include.