FDD Items 3 & 4 · 2025 filing
Nextcar litigation history
What Nextcar disclosed about lawsuits, arbitrations and bankruptcy in the 2025 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 & 4 at a glance
What the filing discloses
- Cases disclosed
- 1
- Item 3, as counted in the filing
- Largest disclosed settlement
- $83K
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
One concluded matter: Schwartz v. JJF Management Services, Rent-A-Wreck of America, and Bundy American (predecessor). Franchise termination dispute filed 2007, ultimately resolved with damages of $83,440.80 awarded to Schwartz plus court orders regarding territory protection. Fully concluded by 2019.
Disclosed in the 2025 Franchise Disclosure Document
Item 4: bankruptcy
Bundy American, LLC (former parent, merged into franchisor via 2025 Corporate Reorganization) and Rent-A-Wreck of America, Inc. filed Chapter 11 petitions in District of Delaware on July 24, 2017. Both dismissed February 13, 2018. Officers Michael DeLorenzo and Ronald Jaffe were officers/directors of both entities at time of filing.
Disclosure signals that moved the score
How this shows up in the verdict
- Significant litigation: Schwartz case established lifetime royalty-free rights for at least one franchisee, creating precedent risk and potential liability exposure
- Going concern status: False rating suggests franchisor financial distress or operational instability
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?