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A32/100FDD 2025
Christian Brothers Automotive — Litigation & Risk
Automotive - Repair & Service · FDD Items 3, 4 & 5
Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
32 / 100
FranchiseVerdict composite
Rating
STRONG
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
295
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$110.6M
Avg loan size
$375K
Participating lenders
34
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
3 yrs
Post-termination restriction on similar businesses
Franchisor can compete
No
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 32/100 rating
Risk Score Breakdown
- 01MINORUnusually high royalty structure (50% of split profits) is unsustainable and creates misaligned incentives between franchisor and franchisee
- 02HIGHTwo active litigations including material arbitration over competing business violation suggests enforcement issues and franchise relationship deterioration
- 03MINORSlow unit growth (7.9% YoY) with 302 units indicates market saturation or franchisee struggles despite claimed $314k avg net income
- 04MINORHigh initial investment ($550k-$680k) combined with 50% profit split creates extended break-even period and poor ROI structure
- 05HIGHNo Item 19 financial performance claim (Going Concern: False) means franchisor won't verify the $314,559 avg net income figure independently
- 06MED15-year term length locks franchisee into exploitative royalty structure with limited exit options
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.