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D68/100FDD 2025

Meineke — Litigation & Risk

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

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Elevated Risk

18 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
18
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
68 / 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
572
Government-backed loans issued
Default rate
27.1%
vs <3% typical · system-wide
5-yr default rate
13.3%
Defaults
133 loans
Loans charged off or defaulted
Total loan volume
$191.5M
Avg loan size
$335K
Participating lenders
152

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

What drove the 68/100 rating

Risk Score Breakdown

  1. 01MINORStagnant unit growth (2.0% YoY) suggests market saturation or system challenges in 716-unit network
  2. 02HIGHMultiple active litigation cases including franchisor-initiated actions and securities class actions indicate governance/compliance issues at corporate level
  3. 03MINORTiered royalty structure (3-7%) with exhaust systems at 7% creates complexity and potential disputes over revenue categorization
  4. 04MINORHigh initial investment range ($224K-$1.2M) paired with only $211K average net income represents 1-5.7 year payback with no growth momentum
  5. 05HIGHDeclining/flat unit count in automotive service sector suggests competitive pressure or franchisee dissatisfaction not reflected in litigation disclosure alone

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.