Garage Force: Litigation & Risk
Home Services · FDD Items 3, 4 & 5
Moderate: Review
1 case disclosed in FDD Items 3 and 4.
FDD Items 3 & 4
Litigation Metrics
- Cases disclosed
- 1
- Total from FDD Items 3 and 4
- Bankruptcy (Item 4)
- None
- Franchisor or officer bankruptcy
- Verdict score
- 59 / 100
- FranchiseVerdict composite · higher is better
- Rating
- A
- A / B / C / D / F verdict grade
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.
- Total 7(a) loans
- 35
- Government-backed loans issued
- Charge-off rate
- 5.7%
- vs 16% franchise average
- 5-yr charge-off rate
- 25.0%
- Defaults
- 2 loans
- Loans charged off or defaulted
- Total loan volume
- $5.3M
- Avg loan size
- $150K
- Participating lenders
- 9
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
- 1 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
- Law of the state in which the Franchised Territory is located (variable, not fixed)
- State whose law governs disputes. Relevant if you're not based there
Extracted from FDD Item 3
Litigation Detail
Nevada State Contractors Board investigated Franchisor's contractor license and its franchisee's use of that license; Franchisor pled guilty to two statutory violations, paid $21,146 in fines/costs, and was placed on one year probation (settled Feb 2023).
What drove the 59/100 verdict
Risk Score Breakdown
- 01MINORRegulatory violation: Nevada State Contractors Board guilty plea to improper licensing and unauthorized operation under franchisor's license (Feb 2023) — suggests compliance/operational oversight issues
- 02MEDNo disclosed net income data (Item 19) — cannot validate actual profitability claims or validate the $507K average revenue translates to viable unit economics
- 03MINORRapid unit growth (22.7% YoY to 228 units) without transparent profitability metrics raises sustainability concerns and potential recruiting-driven growth model
- 04MINORHigh initial investment ($132.9K-$200.6K) + 5% royalty on gross with unverified net income creates cash flow risk if average revenue doesn't translate to adequate margins
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.