AStrongest tier95/100FDD 2026
Pirtek: Litigation & Risk
Business Services · FDD Items 3, 4 & 5
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
- 01MINORNo Item 19 (Average Net Income) disclosure limits profitability transparency despite $1.09M average revenue
- 02HIGHActive litigation (June 2025–January 2026) involving non-compete enforcement signals franchisee compliance/relationship issues
- 03HIGH19.8% YoY unit growth is positive but modest for a 194-unit system; retention rate unclear given litigation
- 04MINORHigh franchise fee ($59,500) relative to bottom-end investment ($247,013) creates 24% upfront cost burden
- 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.