B58/100FDD 2024
Honest1 Auto Care — Litigation & Risk
Automotive - Repair & Service · FDD Items 3, 4 & 5
Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
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
5
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
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
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 58/100 rating
Risk Score Breakdown
- 01MINORUnit count declining 1.6% YoY suggests system contraction and potential market saturation or franchisee dissatisfaction
- 02MINORNo Net Income disclosure (Item 19) prevents validation of actual profitability claims; average revenue of $1.49M may not translate to promised returns
- 03HIGHActive litigation on two fronts (franchisor lawsuit + regional developer arbitration with counterclaim) indicates operational/contractual friction and potential governance issues
- 04MINORHigh investment range ($255K-$1.24M) with 20-year commitment creates long payback exposure if unit economics deteriorate
- 05MINOR6% royalty on gross sales (not net) means franchisees pay regardless of profitability, amplifying risk during economic downturns
- 06HIGHGoing Concern status = False suggests potential financial stress at corporate level, raising sustainability questions
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.