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D72/100FDD 2025

Garage Force — Litigation & Risk

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
35
Government-backed loans issued
Default rate
25.0%
vs <3% typical · system-wide
5-yr default 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
1.5 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
Wisconsin
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 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
  2. 02MEDNo disclosed net income data (Item 19) — cannot validate actual profitability claims or validate the $507K average revenue translates to viable unit economics
  3. 03MINORRapid unit growth (22.7% YoY to 228 units) without transparent profitability metrics raises sustainability concerns and potential recruiting-driven growth model
  4. 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.