Skip to main content
FranchiseVerdict
PIRTEK logo
AStrongest tier95/100FDD 2026

Pirtek: Litigation & Risk

Business Services · FDD Items 3, 4 & 5

Back to overview

Moderate: Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
None
Franchisor or officer bankruptcy
Verdict score
95 / 100
FranchiseVerdict composite · higher is better
Rating
A
A / B / C / D / F verdict grade

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Charge-off rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
88
Government-backed loans issued
Charge-off rate
4.0%
vs 16% franchise average
5-yr charge-off rate
12.5%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$47.5M
Avg loan size
$540K
Participating lenders
41

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
Not waived
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
FL
State whose law governs disputes. Relevant if you're not based there

Extracted from FDD Item 3

Litigation Detail

PIRTEK USA, LLC v. Onpoint Hydraulics, LLC d/b/a Hose Force Solutions, and Guillermo A. Madrazo (18th Judicial Circuit, Brevard County FL, filed June 27, 2025): Franchisor filed against former franchisee for abandoning business and competing in violation of post-termination covenant not to compete; default judgment entered January 15, 2026.

What drove the 95/100 verdict

Risk Score Breakdown

  1. 01MINORNo Item 19 (Average Net Income) disclosure limits profitability transparency despite $1.09M average revenue
  2. 02HIGHActive litigation (June 2025–January 2026) involving non-compete enforcement signals franchisee compliance/relationship issues
  3. 03HIGH19.8% YoY unit growth is positive but modest for a 194-unit system; retention rate unclear given litigation
  4. 04MINORHigh franchise fee ($59,500) relative to bottom-end investment ($247,013) creates 24% upfront cost burden
  5. 05MED10-year term locks franchisees into long commitment without disclosed exit multiples or buyback provisions

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.