F84/100FDD 2025
Fantastic Sams — Litigation & Risk
Personal Services - Beauty & Salon · FDD Items 3, 4 & 5
Elevated Risk
8 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
8
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
84 / 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
456
Government-backed loans issued
Default rate
22.4%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
97 loans
Loans charged off or defaulted
Total loan volume
$65.4M
Avg loan size
$143K
Participating lenders
127
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
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 84/100 rating
Risk Score Breakdown
- 01MINORSystem declining 9.4% YoY with 512 units — significant contraction suggests weakening brand demand and franchisee profitability challenges
- 02MINOREight active legal actions including franchisor-initiated breach/non-compete cases and franchisee claims of disclosure deficiencies and misrepresentation — indicates trust breakdown and potential systemic issues
- 03MEDNet income not disclosed in Item 19 — inability or unwillingness to provide earnings data is major red flag for ROI transparency and may indicate poor franchisee performance
- 04MEDHigh initial investment ($171.5K-$462K) with only $323K average revenue and undisclosed net profit — ROI and payback period cannot be validated
- 05HIGHOngoing litigation over disclosure adequacy suggests franchisor may have misrepresented opportunity to previous franchisees — risk of similar claims against new franchisee
- 06MINOR10-year term is long-duration commitment into a shrinking system with no clear growth strategy or turnaround narrative
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.