FDD Items 3 & 4 · 2025 filing

Cost Cutters litigation history

What Cost Cutters disclosed about lawsuits, arbitrations and bankruptcy in the 2025 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.

Items 3 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 16; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $210K; As stated in Item 3

Bankruptcy (Item 4): None; Franchisor, parent, predecessor or officer

Filing year: 2025; Disclosures cover the prior ten years

Extracted from the 2025 Franchise Disclosure Document

Item 3: litigation

11 cases involving affiliated entities (Supercuts, RPC, The Barbers, Regis); mix of collection/counterclaim arbitrations, misrepresentation claims, a trade secrets suit (Propoint), and a consumer class action (Delamarter); majority settled with payments to franchisees; one current matter (Aboukoura) in process of settlement documentation.

Item 3 (litigation) · 16 matters disclosed · 1 pending listed

Litigation cases

The franchisor

Concluded (1)

Joseph and Elizabeth Sims, Big Hair Salons, LLC v. The Barbers, Hairstyling for Men & Women, Inc.
settled
Brought by a franchisee · filed 2021-02-16 · AAA · 01-21-0001-9146
“… AAA Case No. 01-21-0001-9146 (filed February 16, 2021). A Smartstyle franchisee (“Franchisee”) and its owners (collectively with the Franchisee, the “Sims”) filed an arbitration with the AAA against The Barbers, Hairstyling for Men & Women, Inc. , Regis Corporation, and Regis Corp.”Page 18 of the 2025 FDD, Item 3
Outcome: “This matter was settled on August 9, 2022, for $210,000.00 to be paid by The Regis Entities to the Sims.”

Parent, affiliates, master franchisor and subfranchisor

Pending (1)

Supercuts, Inc. v. Mohamed Aboukoura and iEndeavor, LLC
pending
Brought against a franchisee · Supercuts, Inc. (with parent Regis Corporation) · filed 2021-01-26 · AAA · 01-21-0000-3502
“… (AAA Case No. 01-21-0000-3502, filed January 26, 2021). This case was a collections matter against a franchisee; the franchisee asserted counterclaims for violation of the Virginia Franchising and Consumer Protection Acts, the Minnesota Franchise Act, and common law fraud claims.”Page 18 of the 2025 FDD, Item 3
Outcome: “The parties have agreed to a resolution and documentation of settlement agreement are in process, with Aboukoura agreeing to pay Supercuts and Regis $95,000.00.”

Concluded (13)

Supercuts, Inc. v. Court Curneen and Quartz, LLC
settled
Brought against a franchisee · Supercuts, Inc. (claimant; Regis Corporation joined in the settlement) · filed 2021-01-26 · AAA · 01-21-0000-3506
“… (AAA Case No. 01-21-0000-3506, filed January 26, 2021). This case was a collections matter against a franchisee. The franchisee asserted counterclaims for violation of the Virginia Franchising and Consumer Protection Acts, the Minnesota Franchise Act, and common law fraud claims.”Page 19 of the 2025 FDD, Item 3
Outcome: “This matter was settled on March 3, 2022, with Supercuts, Inc. and Regis Corporation agreeing to pay the franchisee $29,500.00.”
Supercuts, Inc. v. Daniel C. Negussie, Grimt Habtermariam, and DnG, LLC
settled
Brought against a franchisee · Supercuts, Inc. (claimant) · filed 2021-01-26 · American Arbitration Association · 01- 21-0000-3507
“… AAA Case No. 01- 21-0000-3507 (Filed January 26, 2021). Supercuts filed an arbitration with the AAA against Daniel C. Negussie, Grimt Habtermariam, and DnG, LLC (collectively, “Negussie”), for past due royalties, advertising fund contributions and rent in the amount of $105,721.13.”Page 18 of the 2025 FDD, Item 3
Outcome: “This matter was settled on April 12, 2022, for $150,000.00 to be paid by Supercuts to Negussie”
Supercuts, Inc. v. Keith and Marie Shaffer, KeiMar LLC, KieMar II LLC, and KeiMar III LLC
settled
Brought against a franchisee · Supercuts, Inc. (claimant; Regis Corporation joined in the settlement) · filed 2021-01-26 · AAA · 01-21-0000-3504
“… (AAA Case No. 01-21-0000-3504, filed January 26, 2021). This case involved a collections matter against franchisee. Franchisee asserted counterclaims for violation of the Virginia Franchising and Consumer Protection Acts, the Minnesota Franchise Act, and common law fraud claims.”Page 19 of the 2025 FDD, Item 3
Outcome: “This matter was settled on June 16, 2022, with Supercuts Inc. and Regis Corporation agreeing to pay the franchisee and its principals $280,000.00.”
Supercuts, Inc. v. Scott and Vicki Furber and Dawg Concepts, Inc.
settled
Brought against a franchisee · Supercuts, Inc. (claimant) · filed 2021-01-26 · American Arbitration Association · 01-21-0000- 3512
“… AAA Case No. 01-21-0000- 3512 (Filed January 26, 2021). Supercuts filed an arbitration with the American Arbitration Association (“AAA”) against Scott and Vicki Furber and Dawg Concepts, Inc. (collectively, “Furber”), for past due royalties, advertising fund contributions and rent in the amount of $656,725.96.”Page 18 of the 2025 FDD, Item 3
Outcome: “This matter was settled on April 12, 2022, for $110,000.00 to be paid by Supercuts to Furber.”
Propoint Solutions, LLC v. Regis Corporation, Chad Kapadia, et al.
settled
Regis Corporation ('The Franchisor's parent') and its Chief Technology Officer Chad Kapadia · filed 2020-03-31 · N.D. Cal. · 3:20-cv-2181-MMC
“… Case No. 3:20-cv-2181-MMC (N.D. Cal. Filed March 31, 2020). The Franchisor’s parent, Regis Corporation (“Regis”) and Regis’s Chief Technology Officer were sued by Regis’s point of sale and back office system supplier, ProPoint Solutions,”Page 19 of the 2025 FDD, Item 3
Outcome: “Regis and Propoint entered into a settlement agreement, effective June 25, 2021, that provided for the dismissal of the lawsuit and set forth a commercial services agreement” (page 20)
Sea Fever Ventures, Inc., John Lovegrove, and Judith Lafleur-Lovegrove v. Regis Corporation and Supercuts, Inc.
judgment
Brought by a franchisee · Supercuts, Inc. and its parent Regis Corporation · filed 2020-11-18 · American Arbitration Association · 01-20-0015-7648
“… (AAA Case No. 01-20-0015-7648, filed November 18, 2020). A Supercuts franchisee and its owners filed an arbitration with the American Arbitration Association”Page 19 of the 2025 FDD, Item 3
Outcome: “On November 23, 2021, the Arbitrator issued his final award and found that Supercuts’ sale of the franchise to the franchisee violated the FTC Rule, the VRFA, and the VCPA and awarded a total amount to the franchisee of $1,015,104.83, representing damages for the aforementioned claims, together with interest,”
Delamarter v. Supercuts, Inc.
settled
Supercuts, Inc. · filed 2019-11-19 · Hennepin County District Court, Minnesota · 27-cv-19-19280
“… (Case No. 27-cv-19-19280, Hennepin County District Court, Minnesota). This case was filed as a class action against Supercuts on November 19, 2019, on behalf of Plaintiff and a putative class of consumers”Page 21 of the 2025 FDD, Item 3
Outcome: “During a mediation on January 6, 2023, the Parties reached a settlement that requires third-party ProPoint’s insurance carrier, CNA, to pay $285,000 total, which includes $5,000 each for Plaintiffs Delamarter and Cone, with the balance being payable to Plaintiff’s counsel. The case has now been dismissed pursuant to the settlement agreement.”
North Star Solutions, Inc. v. Supercuts, Inc. a Division of Regis, Inc.
settled
Brought by a franchisee · Supercuts, Inc. and Regis, Inc. (n/k/a Regis LLC) · filed 2018-05-04 · AAA · 01-18-0001- 6461
“… (AAA Case No. 01-18-0001- 6461, filed May 4, 2018). A Supercuts franchisee filed an arbitration against Supercuts, Inc., the franchisor, and its affiliate, Regis, Inc. (n/k/a Regis LLC), alleging violation of the Minnesota Franchise Act,”Page 21 of the 2025 FDD, Item 3
Outcome: “Supercuts and Regis denied the allegations and settled the matter in October 2018 without admitting liability by refunding $25,000 to the franchisee”
Kevin Waters, Mary Jane Waters, and Salon Waters, Inc. v. RPC Acquisition Corp. and Regis Corporation
settled
Brought by a franchisee · RPC Acquisition Corp. (franchisor of Pro-Cuts Sports, an affiliate of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2016-03-25 · AAA · 01-16-0001-0283
“… (AAA Case No. 01-16-0001-0283, filed March 25, 2016)”Page 20 of the 2025 FDD, Item 3
Outcome: “$115,000 to Kevin and Mary Jane Waters, and Salon Waters, Inc. and assumed their remaining lease liabilities;” (page 21)
Chad Schwinghammer, Andrea Woodley Schwinghammer, and Schwings Centennial Lakes, Inc. v. RPC Acquisition Corp., Regis Corporation, and Pro-Cuts Corporate Shops, Inc.
settled
Brought by a franchisee · RPC Acquisition Corp., Pro-Cuts Corporate Shops, Inc. (affiliates of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2015-12-18 · American Arbitration Association · 01-15-0006-0307
“… (AAA Case No. 01-15-0006-0307, filed December 18, 2015)”Page 20 of the 2025 FDD, Item 3
Outcome: “Regis and its affiliates paid $300,000 to Chad and Andrea Schwinghammer and Schwings Centennial Lakes, Inc. and assumed their remaining lease liabilities;” (page 21)
David Williams, Shelly Williams, and Look Sharp, LLC v. RPC Acquisition Corp. and Regis Corporation
settled
Brought by a franchisee · RPC Acquisition Corp. (franchisor of Pro-Cuts Sports, an affiliate of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2015-07-10 · American Arbitration Association · 01-15-0004-2079
“… (AAA Case No. 01-15-0004-2079, filed July 10, 2015)”Page 20 of the 2025 FDD, Item 3
Outcome: “$300,000 to David and Shelly Williams and Look Sharp, LLC;” (page 21)
Jason Link and Link JAS, Inc. v. RPC Acquisition Corp and Regis Corporation
settled
Brought by a franchisee · RPC Acquisition Corp. (franchisor of Pro-Cuts Sports, an affiliate of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2015-10-06 · American Arbitration Association · 01-15-0005-2403
“… (AAA Case No. 01-15-0005-2403, filed October 6, 2015)”Page 20 of the 2025 FDD, Item 3
Outcome: “$175,000 to Jason Link and Link JAS, Inc. and assumed their remaining lease liabilities;” (page 21)
Scott Carlson, Jacquelyn Carlson, and SKC Concepts, Inc. v. RPC Acquisition Corp. and Regis Corporation
settled
Brought by a franchisee · RPC Acquisition Corp. (franchisor of Pro-Cuts Sports, an affiliate of Supercuts, Inc.) and Regis Corporation (named as control person) · filed 2015-07-13 · American Arbitration Association · 01-15-0004- 2072
“… (AAA Case No. 01-15-0004- 2072, filed July 13, 2015)”Page 20 of the 2025 FDD, Item 3
Outcome: “$215,000 to Scott Carlson, Jacquelyn Carlson and SKC Concepts, Inc.;” (page 21)

This list shows 15 of the 16 matters Item 3 discloses; the rest are in the filing.

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Disclosure signals that moved the score

How this shows up in the verdict

Multiple fraud and misrepresentation litigation claims including build-out costs and financial performance misstatements undermine credibility
Class action litigation regarding credit card data security on receipts indicates operational/compliance failures and liability exposure
Collections litigation against franchisees with counterclaims of fraud suggests adversarial franchisor-franchisee relationship and potential predatory practices

The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.

Before you weigh a lawsuit

How to read Item 3

A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.

Questions worth asking current and former franchisees, using the contact list in Item 20:

Were you, or anyone you know in the system, party to a dispute with the franchisor?
Was it resolved by settlement, arbitration or a court, and on what terms?
Has the number of disputes gone up or down since you signed?

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