FranchiseVerdict
Hertz logo
B60/100FDD 2026

Hertz — Litigation & Risk

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

Back to overview

Elevated Risk

30 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
30
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
60 / 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
1
Government-backed loans issued
Default rate
100.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$1.4M
Avg loan size
$1.4M
Participating lenders
1

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

What drove the 60/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is False — indicates parent company financial distress or bankruptcy risk
  2. 02MINORUnit count declining 2.5% YoY (2,946 units) — contracting franchise system signals franchisee struggles
  3. 03HIGHExtensive litigation including bankruptcy claims, consumer protection violations, deceptive advertising, and securities cases — reputational and legal exposure
  4. 04MINORNo average revenue or net income disclosure — inability to validate ROI projections or franchisee profitability
  5. 05MINORHigh investment range ($879K–$16.2M) with no protected territory — franchisees compete directly with corporate and other franchisees in same market
  6. 06MINOR7–9% royalty on gross receipts (not net) — extracts fees regardless of profitability
  7. 07MINORShort 5-year term — insufficient time to recoup investment, especially in capital-intensive car rental
  8. 08MINORDeclining brand reputation due to multiple class actions and damage claim disputes — headwind for customer acquisition

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.