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B59/100FDD 2025

Itan — 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
59 / 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
1
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Not required
You retain the right to sue in court
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
California
State whose law governs disputes — relevant if you're not based there

What drove the 59/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Average Unit Volume) disclosed — cannot verify if $512,926 avg revenue supports profitability against $280k-$835k investment range
  2. 02HIGHGoing Concern status is False — indicates potential financial instability or restructuring risk at franchisor level
  3. 03MEDNet income not disclosed — inability to assess actual franchisee profitability; gross revenue alone is insufficient for ROI validation
  4. 04MEDModest unit growth of 16.7% YoY with only 28 total units suggests limited scale and market traction
  5. 05MINORHigh investment ceiling ($835,064) creates significant capital requirement and extended breakeven risk if $512,926 revenue doesn't translate to net profit
  6. 06MINOR6.5% royalty on gross sales is standard but becomes problematic if net margins are compressed

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.