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B66/100FDD 2025

Midas — Litigation & Risk

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

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 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
118
Government-backed loans issued
Default rate
10.9%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
6 loans
Loans charged off or defaulted
Total loan volume
$63.9M
Avg loan size
$542K
Participating lenders
53

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

What drove the 66/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (0.8% YoY contraction) suggests system-wide challenges and potential franchisee dissatisfaction
  2. 02MINORNo Item 19 financial performance disclosure limits ability to validate the $175k average net income claim across diverse locations
  3. 03HIGHMultiple litigation cases involving termination disputes, royalty conflicts, and regulatory violations indicate franchisor-franchisee friction and compliance issues
  4. 04MINORUnprotected territory creates direct competition between franchisees and risk of brand cannibalization
  5. 05MINORHigh royalty rate (10%) combined with declining units suggests franchisees may struggle with profitability and unit economics
  6. 06HIGHGoing Concern status of False raises questions about financial stability and long-term viability of support systems

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.