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B65/100FDD 2024

Nhou — Litigation & Risk

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

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Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
65 / 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
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
Required
Disputes resolved outside court — limits your legal options
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
New Hampshire
State whose law governs disputes — relevant if you're not based there

What drove the 65/100 rating

Risk Score Breakdown

  1. 01MEDNo average revenue or net income disclosed (Item 19) — impossible to assess ROI on $40K-$95K investment
  2. 02MINORExtremely small unit base (only 5 locations) with unverified 100% YoY growth claim — lacks statistical credibility and market validation
  3. 03MINORHigh franchise fee ($63,000) relative to total investment range ($40,350-$95,000) represents 66-156% of minimum investment
  4. 04HIGH'Going Concern' status is FALSE — indicates potential financial instability of franchisor or parent company
  5. 05MINORRoyalty structure escalates from 3% to 4% Year 2+ — reduces profitability despite claims of system growth
  6. 06HIGHNo litigation disclosed but tiny system size limits historical data; insufficient track record to validate claims

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.