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B58/100FDD 2022

The Driveway Company — Litigation & Risk

Home Services - Other · 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
58 / 100
FranchiseVerdict composite
Rating
MODERATE
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
7
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
$926K
Avg loan size
$132K
Participating lenders
2

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
Texas
State whose law governs disputes — relevant if you're not based there

What drove the 58/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Net Income) disclosed — inability to assess actual profitability despite $262,764 average revenue
  2. 02MINOR50% YoY unit growth is aggressive for a 36-unit system; sustainability and franchisee quality concerns at this scaling rate
  3. 03MINOR2014 regulatory settlement with Virginia SCC for operating without valid franchise registration indicates compliance/governance issues
  4. 04MEDHigh royalty structure (7% of gross sales OR minimum fee) — minimum fee amount not disclosed; could significantly impact unit economics
  5. 05MINORFranchise fee of $59,900 is substantial; combined with $88,765-$168,980 total investment, ROI timeline is unclear without net income data

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.