Carstar Franchise Cost, Revenue & Review 2026
- Investment
- $298K – $804K
- Disclosed sales
- $3.2M
- gross sales, not profit
- SBA charge-off
- 0.0%
- on 40 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
CARSTAR is an automotive collision-repair franchise handling insurance-claim auto body work, painting, and frame repair. Franchisees run body shops managing technicians, insurance coordination, parts, and quality control.
FranchiseVerdict summary · 2026
A CARSTAR franchise requires a total initial investment of $298K – $804K, including a $10K franchise fee and an ongoing 1.5% royalty[2]. Per the 2025 FDD, average unit revenue was $3.2M[2]. SBA 7(a) loans show a 0.0% charge-off rate across 40 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: 2025 filing · Data extracted: · Last cited check: · Staleness risk: medium - a newer filing may exist
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored7 of 8 headline figures on this page cite a page of the filing; the rest are marked “Not cited” beside the figure.
Overview
- Investment
- $298K – $804K
- 39th pct Automotive
- Avg gross sales
- $3.2M
- 22nd pct Automotive
- Royalty
- 1.5%
- 1st pct Automotive
- Units
- 471
- 47th pct Automotive
- SBA charge-off
- 0.0%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Automotive · color = vs category peers
Green = favorable by >10% vs Automotive median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $298K – $804K including a $10K franchise fee, 1.5% ongoing royalty.
- RETURNSAverage unit revenue of $3.2M/year (median $2.6M).
- RISKVerdict A (Strongest tier), verdict score 95/100 (higher is better). SBA loan charge-off rate of 0.0% across 40 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHPositive: net +16 franchised outlets in the latest year (48 opened, 32 closed); 83 signed but not yet open (Item 20).
- LEGAL11 litigation matters disclosed in Item 3, higher than typical. Of these, 4 name the franchisor itself, 7 its parent, affiliates or predecessor. Pending claims are allegations, not findings.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- CARSTAR Franchisor SPV LLC
- Parent company
- Driven Systems LLC
- FDD Item 1, page 9 of the 2025 FDD
- Ultimate parent
- Driven Brands Holdings Inc.
- FDD Item 1, page 10 of the 2025 FDD
- Predecessor
- CARSTAR Franchise Systems, Inc. (CSI)
- Prior franchisor entity
- CEO title
- Manager, Chief Executive Officer and President
- Daniel Rivera
- Incorporated in
- DE
- HQ
- 440 South Church Street, Suite 700, Charlotte, North Carolina 28202
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $270.2M
- vs $289.7M prior year
Same owner · FDD Item 1, page 10
6 other brands on this site name Driven Brands Holdings Inc. as parent or ultimate parent in their own FDD.
Portfolio: Driven Brands
Grouped by the owner's name as each filing prints it (this page: the 2025 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Daniel Rivera
- Headquarters
- NC
- Founded
- 1989
- FDD year
- 2025
- States available
- 39
Can you afford it, and what does the money buy?
Entry cost runs 50% above the typical automotive franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $10K | $10K |
| Working capital (3–6 mo) | $10K | $84K |
| Equipment, build-out, other | $278K | $710K |
| Total initial investment | $298K | $804K |
Source: CARSTAR 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $298K – $804K
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $84K
- Top 40% of category vs category
- Franchise fee
- $10K – $10K
- Top 40% of category vs category
- Royalty
- 1.5%
- Set by a formula · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 2.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 1.5% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Training fee | $299 |
| Transfer fee | $0 |
| Renewal fee | $1K |
| Inventory (initial) | $5K – $50K |
| Total fee load | 2.5% of rev |
A 2.5% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 212% above the automotive norm.
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for CARSTAR until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$598K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one CARSTAR unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
- Avg gross sales
- $3.2M
- Per unit, per year
- Median gross sales
- $2.6M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales
- Sample size
- 397 outlets
- vs category median 70 · large
- Range (low → high)
- $115K→$18.6MCited, not corroborated — printed on page 78 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 167 Automotive brands
Revenue is 5.8x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $3.2M/year in gross sales. Median is $2.6M — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 5.8x.
Fee burden
Total ongoing fee load of 2.5% — below the Automotive median of 8.0%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System expanding at 5.6% CAGR over 3 years across 471 units — operators are staying and new ones are joining.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Automotive medians
How Carstar Compares
Category median of published Automotive brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 471
- Opened
- 48
- Last reporting year
- Closed
- 32
- Turnover rate
- 6.8%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +5.6%
- Net unit change over 3 years
- 3-yr CAGR
- +5.6%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Signed, not yet open
- 83
- 0.18 per open outlet · Item 20 Table 5
- Projected new
- 44
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 41 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
520 current owners across 40 states; 22 former (terminated, transferred or not renewed) listed separately.
- CA 77
- TX 54
- NY 46
- WA 32
- IL 29
- VA 20
- MO 19
- NJ 18
- OH 18
- PA 18
- FL 16
- NC 15
- +28 more states
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 40
- Loan volume
- $44.2M
- Median loan
- $762K
- 50th percentile
- Charge-off rate
- 0.0%
- on 40 loans · rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 26
- Defaults
- 0
- Typical loan rate
- 7.0%
- avg rate to borrowers
- Franchised industry avg
- 17.2%
- brand beats franchise avg ↓
- Jobs supported
- 577
- 1.3 per loan
- Lender concentration
- 13%
- top lender's share
Borrower mix: 31% went to startups / new businesses, 69% to established operators
Franchise vs independent — in automotive body, paint, and interior repair and , franchised businesses charge off at 17.2% vs 13.5% for independents — franchising is associated with 27% higher SBA default risk in this category.
Vintage analysis
Carstar charge-off rate by loan vintage
Top lenders financing Carstar franchisees
Showing 3 of 26 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Carstar from SBA 7(a) FOIA data.
- Principal loss rate
- 0.0%
- Avg SBA guarantee
- 76%
- Avg interest rate
- 6.95%
- Lender concentration
- 12.5%
- Job velocity
- 1.3 per $100K
- Startup risk premium
- 0.0pp
- NAICS benchmark
- 8.8%
- NAICS 811121
- Jobs supported
- 577
Top SBA lendersTop lender holds 13% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Live Oak Banking Company | 5 | $5.7M | 0.0% |
| 2 | First Commonwealth Bank | 4 | $1.0M | N/A |
| 3 | BMO Bank National Association | 2 | $700K | 0.0% |
| 4 | Busey Bank | 2 | $536K | 0.0% |
| 5 | Northwest Bank | 2 | $1.1M | 0.0% |
| 6 | First Savings Bank | 2 | $2.6M | 0.0% |
| 7 | First Montana Bank, Inc. | 2 | $2.8M | 0.0% |
| 8 | The Huntington National Bank | 2 | $600K | N/A |
| 9 | SouthState Bank, National Association | 2 | $3.5M | 0.0% |
| 10 | Wells Fargo Bank National Association | 1 | $563K | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| TXTexas | 8 | 0 | 0.0% |
| CACalifornia | 5 | 0 | 0.0% |
| OHOhio | 4 | 0 | 0.0% |
| ILIllinois | 3 | 0 | -- |
| FLFlorida | 2 | 0 | -- |
| IDIdaho | 2 | 0 | 0.0% |
| MTMontana | 2 | 0 | 0.0% |
| NENebraska | 2 | 0 | 0.0% |
| PAPennsylvania | 2 | 0 | -- |
| VAVirginia | 2 | 0 | -- |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
With a 0.0% charge-off rate across 40 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Litigation (Item 3)
Subject: the franchisor is a named party (plaintiff).
3 CARSTAR-initiated breach/noncompete actions; 3 pending parent (Driven Brands Holdings) securities and derivative actions; 2 concluded actions (Gabbay settlement $10K paid; Canada affiliate CAN$438K settlement). Affiliate actions for Arby's and Dunkin' no-poaching settlements also disclosed.
Largest disclosed settlement: $650,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 95 / 100 verdict
- 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
- 02MINORTiered royalty structure (1.5% base + 4% growth fee) creates escalating costs as sales increase, potentially capping franchisee profitability and creating misaligned incentives
- 03MINORFlat unit growth of only 3.5% YoY in a mature auto body repair market suggests market saturation or franchisee dissatisfaction
- 04MINORThree franchisor-initiated breach of contract and non-compete lawsuits indicate aggressive enforcement and potential disputes over territory/operational control
- 05MINORAffiliate 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
Litigation case detail11 matters · Item 3
Litigation cases
The franchisor
Concluded (2)
CARSTAR Franchisor SPV LLC, successor-in-interest to CARSTAR Franchise Systems, Inc. v. Raffiani & Han Enterprises Inc., d/b/a Charlie's Auto Body, and Pauline F. Waldron
concludedBrought against a franchisee · filed 2024-08-20 · United States District Court for the Northern District of New York · 1:24-cv-01027
“Case No. 1:24-cv-01027, in the United States District Court for the Northern District of New York. On August 20, 2024, CARSTAR filed this action against a former franchisee and its guarantor for violating the post-term noncompetition obligations under the franchise agreement and the Lanham Act.”Page 25 of the 2025 FDD, Item 3
Outcome:“The parties have reached a resolution, and the matter has been closed.”
Simple Yes Corp dba Carstar Guardian Auto Body v. CARSTAR Franchisor SPV LLC (Case No. JS21-00225N) and CARSTAR Franchisor SPV LLC v. Simple Yes Corp dba Carstar Guardian Auto Body and Oded Gabbay (Case No. 3:21-cv-01723-M)
settledBrought by a franchisee · filed 2021 · Justice Court of Dallas County, Texas, Precinct 3, Place 2, and the United States District Court for the Northern District of Texas · JS21-00225N; 3:21-cv-01723-M
“On June 14, 2021, a former franchisee filed the small claims action above against us, alleging wrongful termination of its franchise agreement and seeking damages.”Page 27 of the 2025 FDD, Item 3
Outcome:“the Gabbay Parties and CARSTAR, without admitting any wrongdoing, entered into a settlement and release agreement, under the terms of which: (a) we agreed to (1) pay the Gabbay Parties $10,000 to de-identify the applicable CARSTAR Facility”
Status not stated in the filing (2)
CARSTAR Franchisor SPV LLC v. West Coast Collision and Mark J. Shackleford
Brought against a franchisee · filed 2024-10-16 · United States District Court for the Central District of California · 5:24-cv-02198-DDP-SP
“CARSTAR Franchisor SPV LLC v. West Coast Collision and Mark J. Shackleford, Case No. 5:24-cv-02198-DDP-SP, in the United States District Court for the Central District of California. On October 16, 2024, CARSTAR filed this breach of contract action against a former franchisee and its guarantor for amounts owed under the franchise agreement”Page 25 of the 2025 FDD, Item 3
CARSTAR Franchisor SPV LLC, successor-in-interest to CARSTAR Franchise Systems, Inc. v. Wilson Auto Collision, Inc., d/b/a Wilson CARSTAR Niagara, GBWAC LLC, d/b/a Wilson CARSTAR Green Bay West, and Kevin John Wilson
Brought against a franchisee · filed 2024-03-28 · United States District Court for the Western District of North Carolina · 3:24-cv-00354
“Case No. 3:24-cv-00354, in the United States District Court for the Western District of North Carolina. On March 28, 2024, CARSTAR filed this action against former franchisees and their guarantor for violating the post-term noncompetition obligations under their franchise agreements and the Lanham Act.”Page 25 of the 2025 FDD, Item 3
Parent, affiliates and predecessor
Pending (3)
Gaiman v. Fitzpatrick, et al.
pendingThird-party plaintiff · Driven Brands Holdings Inc. (derivative action against its current and former executive officers and board members) · filed 2025-04-30 · United States District Court for the Western District of North Carolina (Charlotte Division) · 3:25-cv-00288
“Gaiman v. Fitzpatrick, et al., Case No. 3:25-cv-00288, in the United States District Court for the Western District of North Carolina (Charlotte Division). On April 30, 2025, Jonathan Gaiman filed a purported derivative complaint in the United States District Court for the”Page 26 of the 2025 FDD, Item 3
Terwilliger v. Fitzpatrick, et al.
pendingThird-party plaintiff · Driven Brands Holdings Inc. (derivative action against its current and former executive officers and board members) · filed 2025-01-10 · United States District Court for the Western District of North Carolina (Charlotte Division) · 3:25-cv-00019
“Terwilliger v. Fitzpatrick, et al., Case No. 3:25-cv-00019, in the United States District Court for the Western District of North Carolina (Charlotte Division). On January 10, 2025, Daniel Terwilliger filed a purported derivative complaint in the United States District Court for the”Page 26 of the 2025 FDD, Item 3
Genesee County Employees' Retirement System v. Driven Brands Holdings Inc., et al.
pendingThird-party plaintiff · Driven Brands Holdings Inc. · filed 2023-12-22 · United States District Court for the Western District of North Carolina (Charlotte Division) · 3:23-cv-00895-MOC-DCK
“Case No. 3:23-cv-00895-MOC-DCK, in the United States District Court for the Western District of North Carolina (Charlotte Division). On December 22, 2023, Genesee County Employees’ Retirement System filed a putative class action lawsuit in the U.S. District Court for the Western District of North Carolina”Page 25 of the 2025 FDD, Item 3
Concluded (4)
Automobile B.W. Inc., MW Auto Collision Inc., Atelier de DeBosselage East End Inc. and EW Auto Collision Inc. v. Carstar Canada SPV LP
settledBrought by a franchisee · Carstar Canada SPV LP (the current franchisor of CARSTAR Facilities in Canada) · filed 2024-07-03 · Superior Court of Quebec (Civil Division) · 500-17-130613-246
“On July 3, 2024, former franchisees filed an action against CARSTAR Canada, the current franchisor of CARSTAR Facilities in Canada, seeking CAN$938,748, plus interest and indemnity.”Page 27 of the 2025 FDD, Item 3
Outcome:“On May 26, 2025, the former franchisees and CARSTAR Canada, without admitting any wrongdoing, entered into a settlement agreement and release, under the terms of which: (a) CARSTAR Canada agreed to pay the former franchi”
New York v. Dunkin' Brands, Inc.
concludedGovernment or regulatory action · Dunkin' Brands, Inc. (DBI) · filed 2019-09-26 · N.Y. Supreme Court for New York County · 451787/2019
“New York v. Dunkin’ Brands, Inc. (N.Y. Supreme Court for New York County, Case No. 451787/2019, filed September 26, 2019). In this matter, the N.Y. Attorney General (the “NYAG”) filed a lawsuit against our affiliate, DBI, related to credential-stuffing cyberattacks during 2015 and 2018.”Page 29 of the 2025 FDD, Item 3
Outcome:“Under consent order, DBI agreed to pay $650,000 in penalties and costs, issue certain notices and other types of communications to New York customers, and maintain a comprehensive information security”
The People of the State of California v. Arby's Restaurant Group, Inc.
settledGovernment or regulatory action · Arby's Restaurant Group, Inc. · filed 2019-03-19 · California Superior Court, Los Angeles County · 19STCV09397
“Case No. 19STCV09397, filed March 19, 2019). On March 11, 2019, our affiliate, Arby’s Restaurant Group, Inc. (“ARG”), entered into a settlement agreement with the states of California”Page 28 of the 2025 FDD, Item 3
The People of the State of California v. Dunkin' Brands, Inc.
settledGovernment or regulatory action · Dunkin' Brands, Inc. · filed 2019-03-19 · California Superior Court, Los Angeles County · 19STCV09597
“Los Angeles County, Case No. 19STCV09597, filed March 19, 2019). On March 14, 2019, our affiliate, Dunkin Brands, Inc. (“DBI”), entered into a settlement agreement with the Attorneys General of 13 states and jurisdictions concerning the inclusion of “no-poaching”Page 28 of the 2025 FDD, Item 3
Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.
What are you signing up for?
Ongoing fees run about 2.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Right of first refusalℹ | Yes |
| RoFR response window | 90 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | NC |
| Litigation count | 11 |
View Item 3 litigation summary
3 CARSTAR-initiated breach/noncompete actions; 3 pending parent (Driven Brands Holdings) securities and derivative actions; 2 concluded actions (Gabbay settlement $10K paid; Canada affiliate CAN$438K settlement). Affiliate actions for Arby's and Dunkin' no-poaching settlements also disclosed.
Items 10, 11
Training & Operations
- Classroom training
- 16 hrs
- On-the-job training
- 4 hrs
- Training location
- Charlotte, North Carolina or another location CARSTAR designates
- Ongoing training
- Required
- Site selection
- Franchisee proposes, franchisor must approve
- Franchisor financing
- Not offered
- Item 10
- POS system
- CARSTAR Solution (CCC One Innovate or CCC One Perform with Mitchell MRC)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: CARSTAR Solution (CCC One Innovate or CCC One Perform with Mitchell MRC)
Item 20 · call current owners
Franchisee Contacts
542 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a CARSTAR franchise?
The total investment to open a CARSTAR franchise ranges from $298K – $804K, with an initial franchise fee of $10K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do CARSTAR franchise owners earn?
According to Item 19 of the CARSTAR FDD, the average gross sales per unit is $3.2M. The median is $2.6M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns CARSTAR?
CARSTAR is franchised by CARSTAR Franchisor SPV LLC. Its parent company is Driven Systems LLC. The ultimate parent named in the FDD is Driven Brands Holdings Inc.. Source: FDD Item 1, 2025 filing.
What is Item 19 in the CARSTAR FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the CARSTAR FDD and qualifies whose outlets they describe.
What is CARSTAR's franchise failure rate?
Based on SBA 7(a) loan data, CARSTAR has a charge-off rate of 0.0% across 40 loans, meaning 0.0% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many CARSTAR franchise locations are there?
As of their most recent FDD filing, CARSTAR has 471 total units in the United States, including 471 franchised units and 0 company-owned units. 48 new units were opened in the latest reporting year.
Is CARSTAR a good franchise to buy?
FranchiseVerdict rates CARSTAR as a A-grade franchise with a verdict score of 95 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.