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B66/100FDD 2025

Lice Clinics of America — Litigation & Risk

Health & Wellness - Other · FDD Items 3, 4 & 5

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Elevated Risk

7 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
7
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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
Utah
State whose law governs disputes — relevant if you're not based there

What drove the 66/100 rating

Risk Score Breakdown

  1. 01MEDSystem contracting sharply (-11.9% YoY decline from 101 to 89 units) indicates franchisee failure or mass exits
  2. 02MINORFour active breach of contract/non-compete lawsuits filed by franchisor against franchisees in 2024 alone suggests franchisor-franchisee conflict and enforcement issues
  3. 03MINORThree regulatory settlement orders in California, Virginia, and Washington indicate compliance failures or customer protection violations
  4. 04MINORAverage revenue of $240,845 generates only ~$19,268 in annual royalties (8%), making 8% royalty burden heavy on thin margins
  5. 05MEDNet income not disclosed in Item 19 prevents verification that $240K revenue supports living wage after royalties, rent, labor, and supplies
  6. 06MEDHigh initial investment ($120K-$168K) combined with declining unit count and undisclosed profitability creates poor risk-reward ratio
  7. 07MINORFive-year term is relatively short given capital investment and client acquisition ramp time in service business

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.