Bottom line
- Total investment $24K – $804K including a $10K franchise fee.
- Average unit revenue of $3.2M/year (median $2.6M).
- Rated STRONG with a risk score of 44/100. SBA loan default rate of 0.0% across 77 loans (below the industry average).
- 14 litigation matters disclosed in Item 3 — higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one CARSTAR unit return on the cash you put in?
Unlevered ROIC · per unit
127%
Above typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 CARSTAR units return on equity?
Equity IRR · 5-yr
24.9%
3.03× MOIC
Year-1 DSCR
3.40×
EBITDA ÷ debt service
Equity required
$19.7M
on $35.3M purchase
Total debt
$15.6M
SBA $5.0M + senior + seller note
Overview
About
CARSTAR franchisees operate collision repair and auto body shops, handling insurance claim-related repairs, paint work, frame straightening, and vehicle restoration. Day-to-day operations involve managing technicians, coordinating with insurance adjusters and customers, ordering parts, managing inventory, and ensuring quality control on vehicle repairs.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 5 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
CARSTAR presents meaningful caution-level risk due to undisclosed profitability, escalating royalty structures, parent company litigation involving securities fraud allegations, and slow unit growth despite high average unit volumes.
Score breakdown · what drove the 44 / 100 rating
- 01HIGHParent company involved in multiple pending litigation matters including putative class action securities fraud and five derivative complaints against officers/board members, indicating governance and disclosure concerns
- 02MINORNo Item 19 (Average Unit Volume) disclosure despite $3.2M average revenue, preventing transparent ROI assessment and suggesting franchisor may be hiding profitability data
- 03MINORTiered royalty structure (1.5% base + 4% growth fee) creates escalating costs as sales increase, potentially capping franchisee profitability and creating misaligned incentives
- 04MINORFlat unit growth of only 3.5% YoY in a mature auto body repair market suggests market saturation or franchisee dissatisfaction
- 05MINORThree franchisor-initiated breach of contract and non-compete lawsuits indicate aggressive enforcement and potential disputes over territory/operational control
- 06MINORAffiliate settlements (Arby's, Dunkin') on no-poaching and data privacy suggest systemic corporate compliance issues that may extend to CARSTAR operations
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
95 numbers
One-time purchase · CSV download · Validation questions included
FDD download
CARSTAR · FDD (2025) PDF