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D72/100FDD 2025

No Grease! Barbershop — Litigation & Risk

Personal Services - Beauty & Salon · FDD Items 3, 4 & 5

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Moderate — Review

1 case disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
1
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
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
4
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
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
North Carolina
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01MEDUnit count declined 14.3% YoY (13 units) — significant contraction suggesting system-wide challenges or closures
  2. 02MINORRecent Maryland Securities Division Consent Order (January 2025) for unregistered franchise offering — regulatory compliance failure and legal exposure
  3. 03MEDNo disclosed average revenue or net income (missing Item 19) — inability to assess profitability or ROI, major due diligence gap
  4. 04MEDHigh initial investment ($157K-$303K) with 6% royalty burden on undisclosed revenue base — unclear unit economics
  5. 05HIGHGoing Concern status False — potential financial instability or solvency concerns at franchisor level
  6. 06MINORShrinking franchise system with declining momentum — increases risk of inadequate support and franchisor viability

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.