A54/100FDD 2025
European Wax Center — Litigation & Risk
Personal Services - Beauty & Salon · FDD Items 3, 4 & 5
Moderate — Review
5 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
54 / 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
332
Government-backed loans issued
Default rate
2.6%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
7 loans
Loans charged off or defaulted
Total loan volume
$131.6M
Avg loan size
$396K
Participating lenders
49
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
Texas
State whose law governs disputes — relevant if you're not based there
What drove the 54/100 rating
Risk Score Breakdown
- 01MINORNo Item 19 (Average Unit Volume) disclosure prevents accurate ROI assessment on $327k-$836k investment
- 02MINORStagnant unit growth (2.3% YoY) suggests market saturation or franchisee satisfaction issues in 1067-unit system
- 03HIGHMultiple active litigations including governmental investigation into non-poaching provisions indicate compliance/culture risks
- 04MINORHigh initial investment range ($509k median) with 6% royalty creates tight breakeven margins without revenue transparency
- 05MINORFranchise termination arbitration (Worley Wax) and vendor disputes signal operational/relationship friction
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.