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B58/100FDD 2025

Grease Monkey — Litigation & Risk

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

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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
58 / 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
166
Government-backed loans issued
Default rate
14.2%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
15 loans
Loans charged off or defaulted
Total loan volume
$114.5M
Avg loan size
$689K
Participating lenders
49

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
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
Colorado
State whose law governs disputes — relevant if you're not based there

What drove the 58/100 rating

Risk Score Breakdown

  1. 01HIGHActive class action litigation (Aug 2024) for gender-based discrimination creates legal/reputational risk and potential operational mandate changes
  2. 02MINORUnprotected territory exposes franchisees to direct competition from other Grease Monkey locations and cannibalization of revenue
  3. 03MINORSlow unit growth (4.0% YoY) suggests market saturation or franchisee satisfaction issues; 371 units is modest for a mature brand
  4. 04HIGHNo Item 19 Financial Performance Representation (Going Concern = False) prevents validation of claimed $227K net income; actual franchisee profitability opaque
  5. 05MINORHigh royalty burden (6.0%) combined with $39,900 franchise fee and $291K-$2M initial investment creates 5-7 year breakeven pressure if revenue underperforms

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.