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A45/100FDD 2026

Cookie Cutters Haircuts for Kids — Litigation & Risk

Education - Children's Programs · 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
45 / 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
22
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

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

What drove the 45/100 rating

Risk Score Breakdown

  1. 01MINORMinimal system growth (1.7% YoY) suggests market saturation or stagnation in a 120-unit system
  2. 02MINORNo unprotected territory creates direct competition risk — multiple franchisees can operate in same area
  3. 03MEDNet income not disclosed by franchisor — inability to verify $314K revenue translates to viable profit
  4. 04HIGH2025 litigation alleging unauthorized financial performance representations indicates potential disclosure violations under FTC rules
  5. 05MINORHigh investment-to-revenue ratio (138K-390K initial vs 314K avg revenue) means 44-124% payback period before profit
  6. 06MINOR5% royalty on gross sales (not net) creates cash flow pressure during low-revenue months

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.