A49/100FDD 2025
MassageLuXe — Litigation & Risk
Health & Wellness - Other · FDD Items 3, 4 & 5
Moderate — Review
3 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
49 / 100
FranchiseVerdict composite
Rating
STRONG
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
76
Government-backed loans issued
Default rate
3.3%
vs <3% typical · system-wide
5-yr default rate
14.3%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$34.8M
Avg loan size
$458K
Participating lenders
29
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
Missouri
State whose law governs disputes — relevant if you're not based there
What drove the 49/100 rating
Risk Score Breakdown
- 01HIGHActive litigation with former developer involving breach of contract and franchise law violations creates legal precedent risk and potential franchisor liability exposure
- 02MINORModest unit growth of 7.0% YoY suggests market saturation or franchisee satisfaction concerns in a mature 92-unit system
- 03MINORThree pending legal actions could signal franchisor-franchisee relationship friction, territorial disputes, or aggressive termination practices
- 04MEDNo Item 19 financial performance representation limits transparency; disclosed $243k average net income may not reflect typical franchisee reality
- 05MINORHigh initial investment ($570k-$799k) paired with modest 5-6% royalty structure and $243k average net income yields concerning ROI timeline (2.3-3.3 years to break even)
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.