B60/100FDD 2026
Bandag — Litigation & Risk
Automotive - Repair & Service · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
60 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default 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
Default rate
11.1%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$6.2M
Avg loan size
$686K
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
Waived
You give up the right to a jury trial
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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Tennessee
State whose law governs disputes — relevant if you're not based there
What drove the 60/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 3.1% YoY (157 units) suggests system contraction and potential market saturation or franchisee struggles
- 02MEDZero financial transparency: no disclosed average revenue, net income, or royalty rate prevents ROI validation
- 03MINORExtremely wide investment range ($356.5K–$6.5M) indicates high variability in unit economics and unclear cost structure
- 04MINORNo territory protection exposes franchisees to direct brand competition and cannibalization within service areas
- 05MINORLow franchise fee ($2,500) relative to high capex suggests franchisor relies on royalties; hidden fee structure likely
- 06MINOR5-year term is shorter than industry standard (typically 10 years), increasing renewal risk and limiting payback periods
- 07MEDItem 19 (financial performance representations) not disclosed—cannot validate profitability claims or benchmark performance
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.