D68/100FDD 2025
Rent-A-Wreck — Litigation & Risk
Automotive - Repair & Service · 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)
—
Franchisor or officer bankruptcy
Overall risk score
68 / 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
3
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
$1.6M
Avg loan size
$528K
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
Maryland
State whose law governs disputes — relevant if you're not based there
What drove the 68/100 rating
Risk Score Breakdown
- 01MINORDeclining unit count (48 units, only 4.4% YoY growth) suggests market saturation or franchisee struggles in the car rental space
- 02MEDNo disclosed average net income despite $951.32k average revenue — lack of transparency on profitability is a major concern
- 03HIGHActive litigation history involving wrongful termination, reservation diversion (competitive harm), and contempt findings indicates operational/compliance issues with franchisor
- 04MINORWide investment range ($189.5k–$2.59M) suggests inconsistent unit economics and unclear scalability
- 05HIGHGoing Concern status is FALSE — while not a going concern issue, combined with slow growth and litigation, suggests systemic challenges
- 06MINORMonthly minimum royalty floor ($800–$2,400) may be burdensome for underperforming locations in a declining 4.4% growth environment
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.