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B67/100FDD 2023

Detail Garage — Litigation & Risk

Automotive - Repair & Service · FDD Items 3, 4 & 5

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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
67 / 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
7
Government-backed loans issued
Default rate
33.3%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$1.1M
Avg loan size
$158K
Participating lenders
5

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
2 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

What drove the 67/100 rating

Risk Score Breakdown

  1. 01HIGHLitigation history: settled class action for misrepresentation of franchise costs and pricing control, plus California DFPI consent order for disclosure failures and unlicensed financing schemes
  2. 02MEDNo Item 19 financial disclosure (Avg Revenue and Net Income not disclosed) prevents validation of ROI claims and unit profitability
  3. 03MINORSlow unit growth of only 5.4% YoY in a 92-unit system suggests market saturation, franchisee struggles, or refranchising challenges
  4. 04MINORMid-to-high initial investment ($160,975–$270,450) with opaque profitability creates high downside risk if unit economics are weak
  5. 05MINORConsent order indicates past regulatory violations around affiliate inventory financing and parent company disclosure—signals governance and transparency issues

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.