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F79/100FDD 2023

medspa810 — Litigation & Risk

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

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Moderate — Review

2 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
79 / 100
FranchiseVerdict composite
Rating
AVOID
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
6
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
Total loan volume
$2.0M
Avg loan size
$325K
Participating lenders
3

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

What drove the 79/100 rating

Risk Score Breakdown

  1. 01MEDSevere unit decline: 25% contraction YoY (3 units remaining) suggests systemic business model or support failures
  2. 02HIGHMaterial litigation history: Two fraud/breach cases totaling $725,000 in settlements/judgments against predecessor entity and principals raises governance and integrity concerns
  3. 03MINORNo financial disclosure: Absent Item 19 revenue/profitability data prevents ROI validation; combined with unit collapse, suggests franchisor may be hiding poor unit economics
  4. 04HIGHGoing concern flag: True status indicates potential financial instability of franchisor itself, creating support and survival risk
  5. 05MINORHigh investment-to-unit ratio: $475,950–$867,950 entry cost with only 3 franchisees operating implies minimal proven demand and high failure risk
  6. 06HIGHNon-transparent rebranding: Transition from SPA 810 to medspa810 may obscure negative history; litigation involved 'predecessor' entity but same principals/operations

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.