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D70/100FDD 2025

SCA Appraisal Services — 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
70 / 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
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 70/100 rating

Risk Score Breakdown

  1. 01MINOR50% royalty rate is extremely high and leaves minimal margin for franchisee profitability after operating expenses
  2. 02MINORNo average revenue or net income disclosure prevents ability to assess realistic earning potential or ROI timeline
  3. 03MINORStagnant unit growth (88 units, only 1.1% YoY) indicates system is not scaling and may be contracting
  4. 04HIGHGoing concern status is FALSE, suggesting potential financial instability or viability questions at franchisor level
  5. 05HIGH2015 litigation involving breach of contract and fraud allegations, even if settled, indicates franchisor-franchisee conflict and operational disputes
  6. 06MINORNo protected territory means franchisees compete directly with other SCA franchisees and company-owned locations in same market
  7. 07MINORLow initial investment ($27,300–$79,950) relative to 50% royalty suggests franchisor prioritizes volume licensing over franchisee success
  8. 08MED5-year term is relatively short and provides limited runway to recoup investment and build equity

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.