Moderate: Review
5 cases disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 5
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 61 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 9
- Government-backed loans issued
- Charge-off rate
- N/A
- vs 16% franchise average
- 5-yr charge-off rate
- N/A
- Defaults
- N/A
- Loans charged off or defaulted
- Total loan volume
- $1.5M
- Avg loan size
- $170K
- Participating lenders
- 8
FDD Items 5, 6 & 17: What You Give Up
Contract Risk Indicators
- Mandatory arbitration
- Not required
- You retain the right to sue in court
- Jury trial waiver
- Not waived
- Non-compete
- 1 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
- NJ
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
5 pending actions including class actions re fraudulent counter sales (Bacon v ABG), toll fee claims (Valli v ABG), shareholder derivative suit (De Angelis), and two Travelers United consumer fraud complaints. Several concluded matters resolved by settlement. FTC consent orders for Budget affiliate (fuel charges, damage disclosures).
What drove the 61/100 verdict
Risk Score Breakdown
- 01HIGHActive litigation involving consumer fraud, deceptive counter sales practices, and contractor misclassification suggests systemic operational issues that could expose franchisees to legal liability
- 02MEDNo disclosed average revenue or net income data prevents accurate ROI calculation; combined with high investment range ($625.5K-$1.59M), franchisees cannot validate unit economics
- 03MEDMultiple concluded settlements for undisclosed surcharges, unwanted text messages, and administrative fees indicate pattern of problematic revenue collection practices that could damage franchisee reputation
- 04MINORUnprotected territory creates cannibalization risk in dense markets; with only 10.1% YoY unit growth and 1,900 locations, saturation concerns are legitimate
- 05MINORHigh 7.5% royalty on gross revenue (not net profit) compounds cash flow pressure, especially given industry's thin margins in car rental
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.