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B65/100FDD 2025

Driving Academy — Litigation & Risk

Education - Tutoring & Test Prep · FDD Items 3, 4 & 5

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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
65 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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
Governing law
New Jersey
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MINORNo average revenue or net income disclosure (Item 19) — impossible to validate ROI claims or profitability benchmarks
  2. 02MINORExtreme unit growth (300% YoY) with only 6 locations suggests either aggressive recent expansion or cherry-picked data; unsustainable growth rates often precede contraction
  3. 03HIGHGoing Concern flag is FALSE but should be verified — unclear if franchisor disclosed financial stability issues in FDD Item 21
  4. 04MEDHigh royalty structure (10% + $1,000 minimum) with undisclosed revenue makes break-even analysis impossible; $1,000 minimum may be unsustainable for struggling locations
  5. 05MINORLarge investment range ($224K-$557K spread) indicates high variability in startup costs; unclear what drives the 149% difference
  6. 06MINORProtected territory lacks specifics — size, density, and exclusivity definitions should be questioned
  7. 07MEDOnly 6 franchised units provides minimal track record and limited peer validation data

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.