FranchiseVerdict
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A52/100FDD 2025

Regal Nails Salon & Spa — Litigation & Risk

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

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Moderate — Review

5 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
52 / 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
2
Government-backed loans issued
Default rate
50.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$200K
Avg loan size
$100K
Participating lenders
2

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
1 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
No
Franchisor can match any purchase offer when you try to sell
Governing law
Louisiana
State whose law governs disputes — relevant if you're not based there

What drove the 52/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-4.8% YoY) indicates system contraction and potential franchisee dissatisfaction
  2. 02MINORNo average revenue or net income disclosure (Item 19) prevents realistic ROI assessment despite high investment range ($172k-$720k)
  3. 03HIGHLitigation history includes collection lawsuits against franchisees and state regulatory violations in Virginia and California for franchise registration non-compliance
  4. 04MINORHigh royalty range ($500-$15,000/month) lacks transparency on how tiers are determined and creates unpredictable cost structure
  5. 05MINORUnprotected territory creates direct competition risk between franchisees within same market
  6. 06HIGH'Going Concern' status is False, suggesting potential financial instability of franchisor

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.