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D70/100FDD 2025
Stem Guys Tire Supplies — Litigation & Risk
Food & Beverage - Quick Service · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
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
- 01HIGHGoing Concern status is FALSE — indicates franchisor financial instability or operational viability concerns
- 02MINOROnly 1 unit in system with unknown growth trajectory — suggests early-stage, unproven concept or system collapse
- 03MEDNo Item 19 (Financial Performance Representations) disclosed — cannot independently verify claimed $439K revenue and $118K net income figures
- 04MINORHigh franchise fee ($49,500) relative to single-unit track record — disproportionate upfront cost for unvalidated business model
- 05MINOR7% royalty on gross revenue (not net) — franchisee bears revenue risk while franchisor takes fixed percentage regardless of profitability
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.