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A38/100FDD 2024

Elements Massage — Litigation & Risk

Health & Wellness - Other · 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
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
59
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
$17.3M
Avg loan size
$293K
Participating lenders
25

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

What drove the 38/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-0.4% YoY) suggests system contraction and potential franchisee dissatisfaction
  2. 02MINORTwo pending arbitrations involving IP, noncompetes, and supply disputes indicate franchisor-franchisee relationship deterioration
  3. 03MINORPrior completed arbitration with franchise fee refund suggests previous franchisee grievances were substantial enough to warrant settlement
  4. 04MEDNet income not disclosed in FDD Item 19 makes ROI projections impossible to validate against $470K-$694K investment
  5. 05MINORHigh initial investment ($470K minimum) paired with 6% royalty on $894K avg revenue ($53.6K annually) leaves thin margins for labor-intensive massage business
  6. 06HIGHLitigation involving Amazing Lash (sister brand under same franchisor) raises questions about corporate governance and franchise system management quality

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.