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B55/100FDD 2026

Frenchies Modern Nail Care — Litigation & Risk

Personal Services - Beauty & Salon · FDD Items 3, 4 & 5

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Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
55 / 100
FranchiseVerdict composite
Rating
MODERATE
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
30
Government-backed loans issued
Default rate
19.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
4 loans
Loans charged off or defaulted
Total loan volume
$7.2M
Avg loan size
$240K
Participating lenders
13

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 55/100 rating

Risk Score Breakdown

  1. 01MEDNet income not disclosed in FDD Item 19 — cannot assess actual profitability or validate $605k average revenue claim
  2. 02MEDOnly 26 units system-wide with modest 13% YoY growth suggests limited scale and unproven business model maturity
  3. 03MINORHigh total investment ($472k-$550k) paired with unknown profit margins creates unclear ROI timeline
  4. 04MINORMinimum royalty fee of $100/week ($5,200/year) is owed regardless of revenue, creating cash flow pressure in slow periods
  5. 05HIGHNo going concern disclosure is positive, but small unit count and absent financial performance data raise sustainability questions

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.