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F80/100FDD 2026

The Patch Boys — Litigation & Risk

Automotive - Repair & Service · FDD Items 3, 4 & 5

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
80 / 100
FranchiseVerdict composite
Rating
AVOID
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
6
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$611K
Avg loan size
$102K
Participating lenders
3

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
1.5 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
Michigan
State whose law governs disputes — relevant if you're not based there

What drove the 80/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-7.0% YoY) indicates shrinking franchise system and potential franchisee dissatisfaction
  2. 02MINORMultiple regulatory actions including NY AG and Minnesota Department of Commerce investigations with consent orders suggest systemic compliance failures
  3. 03MEDNo disclosed average net income despite $293k average revenue raises profitability transparency concerns and questions about actual franchisee earnings
  4. 04HIGHLitigation history involving franchise law violations and improper disclosure of criminal convictions indicates governance and ethical issues with franchisor
  5. 05HIGHNo going concern status (False) combined with declining units suggests potential financial instability at corporate level
  6. 06MINORHigh royalty rate (8%) on declining revenue base may strain franchisee profitability as system contracts

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.