A38/100FDD 2025
Take 5 Oil Change — Litigation & Risk
Automotive - Repair & Service · FDD Items 3, 4 & 5
Elevated Risk
11 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
11
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
38 / 100
FranchiseVerdict composite
Rating
STRONG
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
19
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$22.1M
Avg loan size
$1.2M
Participating lenders
5
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
3 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
North Carolina
State whose law governs disputes — relevant if you're not based there
What drove the 38/100 rating
Risk Score Breakdown
- 01HIGHSignificant litigation involving parent company covering securities, fiduciary duties, no-poaching agreements, and data privacy—suggests governance and compliance issues that could affect franchise operations
- 02HIGHGoing Concern status indicates the franchisor's financial stability is questioned; this threatens support infrastructure, marketing, and system viability
- 03MINORRapid unit expansion (32.9% YoY growth) without corresponding profitability transparency raises concerns about unit quality, franchisee selection, and whether growth is sustainable or masking underlying problems
- 04MINORHigh investment range ($912K–$2M) combined with 7% royalty creates significant break-even pressure; average net income of $362K means some franchisees likely operate below system average
- 05HIGHLarge litigation portfolio suggests potential hidden liabilities that could result in franchisor assessments, operational changes, or system instability affecting franchisee businesses
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.