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D69/100FDD 2025

OpenWorks — Litigation & Risk

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

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Elevated Risk

9 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
9
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
69 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

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
0.5 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
Arizona
State whose law governs disputes — relevant if you're not based there

What drove the 69/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 32.7% year-over-year (414 units), indicating systemic franchisee failure or abandonment
  2. 02MINORNo average revenue or net income disclosure (Item 19) prevents realistic ROI assessment and suggests poor unit economics
  3. 03MED15% royalty on gross revenue is exceptionally high and creates cash flow pressure, especially without disclosed profitability data
  4. 04HIGHMultiple litigation cases including breach of contract, labor law violations (minimum wage, overtime, meal periods), and fraud/misrepresentation claims signal operational and compliance problems
  5. 05HIGHGoing Concern status is FALSE, indicating auditor doubts about the franchisor's financial viability
  6. 06MINORUnprotected territory creates direct competition risk from other franchisees in the same area
  7. 07MINORHigh franchise fee ($72,000) combined with declining unit count suggests franchisees are not recouping investments

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.