B55/100FDD 2025
Great Clips — Litigation & Risk
Personal Services - Beauty & Salon · FDD Items 3, 4 & 5
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
548
Government-backed loans issued
Default rate
5.3%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
27 loans
Loans charged off or defaulted
Total loan volume
$119.5M
Avg loan size
$218K
Participating lenders
121
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
1 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
What drove the 55/100 rating
Risk Score Breakdown
- 01MINORSystem stagnation: 4,439 units with only 0.3% YoY growth indicates mature/declining market with minimal expansion opportunity
- 02MINORNo Item 19 financial disclosure: Average revenue of $399,179 and net income of $82,637 are unverified estimates, making ROI projections unreliable
- 03MINORThin profit margins: 20.7% net margin leaves little room for error; 6% royalty ($23,951 avg annual) plus operating costs create vulnerability to economic downturns
- 04MINORHigh entry cost relative to returns: $187,800-$419,900 investment against $82,637 avg net income yields 2-4 year payback with execution risk
- 05MINORCommoditized service model: Low-cost haircut category faces Amazon-style disruption (mail-in clipper kits, DIY trends, budget competitors)
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.