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D72/100FDD 2025

Prime Car Wash — Litigation & Risk

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

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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)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
6
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
Total loan volume
$6.3M
Avg loan size
$1.1M
Participating lenders
3

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
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
Indiana
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MINORSevere profitability crisis: Average net income of $32,480 on $1.96M revenue = 1.65% net margin after 4% royalty, making ROI on $1.9M-$3.7M investment potentially 10+ years
  2. 02HIGHLitigation involving CEO/CFO alleging breach of fiduciary duty and mismanagement of affiliated entities raises governance and trust concerns for franchisees
  3. 03MEDExtremely small system (9 units) with unknown growth trajectory indicates limited support infrastructure and inability to achieve economies of scale
  4. 04HIGHGoing Concern status = False suggests financial distress at corporate level, threatening franchisor's ability to provide promised support and services
  5. 05MINORWide investment range ($1.9M-$3.7M spread) with no clear explanation indicates unpredictable startup costs and potential hidden expenses

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.