Inside Mighty Dog Roofing’s franchisee troubles

Seven current and former franchisees suing Mighty Dog Roofing spoke out on an industry podcast this week. 

“My franchise lawyer calls them a serial franchisor,” Dave Bauer, a franchisee in Columbus, Ohio, told Roofing Insights host Dmitry Lipinskiy. “That’s a franchisor who sells you territory and then charges you royalties and fees to death until you collapse, charges you the money to get out of your franchise, then takes everything you built and sells it to somebody else.”

Catch up quick: Jon Sabo founded Mighty Dog Roofing in 2012 as “Roof Roof,” serving the Carolinas. In 2020, the company was acquired by HorsePower Brands — owned by Josh Skolnick and Zack Beutler — which oversees a portfolio of nine franchised home service brands.

What’s happening: Several Mighty Dog Roofing operators have sued the franchisor over the past year, alleging that the company “fraudulently induced them to invest in the franchise system by disseminating falsified financial performance figures and fabricating a proprietary business model in violation of the FTC Franchise Rule,” according to court documents from three suits. 

• Dave Bauer joined Mighty Dog in 2021. He told Homepros that the company’s Item 19 — a document outlining financials for potential franchisees — advertised a 32 percent EBITDA margin in the first year, even though independent sources peg the average industry EBITDA margin at 10 to 15 percent. 
• Plaintiffs also allege that Mighty Dog presented a separate financial worksheet called “MDR Unit Economics” during the sale process, with information that “inflated revenue, gross profit, and net margins.” 

Of note: Mighty Dog has fought back, initiating four separate lawsuits against former franchisees. The company alleged that they violated non-compete clauses by starting new roofing companies within two years of terminating their franchises. (Defendants in these cases have countered with similar concerns of “fraudulent misrepresentation” by Mighty Dog during the sale process.)

• “We believe strongly in honoring the commitments, terms, and standards that are agreed upon at the beginning of the franchise relationship,” a Mighty Dog representative told Homepros in an email. “When those obligations are not followed, it can have an impact on other franchisees, customers, and the overall brand.”

State of play: As of December 2025, there were 71 active Mighty Dog locations across the U.S., which generated aggregate gross annual sales of over $100 million, according to the company’s 2026 Franchise Disclosure Document (FDD). 

• The company terminated 100 outlets in 2025, including three company-owned outlets, though Mighty Dog clarified that figure also includes businesses that were sold or transferred to new ownership.

• Its highest-performing “group” generated over $6.6 million in gross sales during the year, while the lowest-performing generated just over $34,600, a large gap across franchises. 
• This year, Mighty Dog won number one in its category in Entrepreneur Magazine’s Franchise 500. 

What they’re saying: “It only took [us] about six months to figure out, ‘Wait a minute, this isn’t working, I’m not making any money,’” Bauer said. His company has grown every year — from $450,000 in sales to $4.5 million — but his profit margin has not improved. 

• “You never dig out. There’s no breaking point where everything’s cool,” he added. 

The other side: “We provide compliant information so prospective franchisees can make an informed decision,” the Mighty Dog representative said. “In addition, our FDD encourages candidates to do their own due diligence, including speaking directly with current and former franchisees listed in our disclosure documents.”

• “Franchisees have access to Franchise Business Coaches, subject matter experts, training programs, operational resources, and multiple platforms to get answers and support,” the representative added.

Between the lines: Mighty Dog this summer clinched a victory in one of its cases, when the suit reached federal court. The judge dismissed the franchisee’s claims against Mighty Dog because of a general release clause in the transfer agreement, absolving the franchisor of any responsibility. 

What we’re watching: Of the seven active cases involving Mighty Dog, two have been paused to seek mediation, and two are in the discovery phase. The company has also moved to dismiss three cases and is awaiting a judge’s decision. 

• “We have and always will stand behind our brand, our franchisees, and the commitments made within our franchise system,” the Mighty Dog representative said.   
• Meanwhile, Bauer said he hopes for a good outcome — one where he can start his own roofing company outside the Mighty Dog brand. 
• “I’ve made a lot of mistakes in my life, but by far, this is the worst mistake that I’ve ever made,” he said.