FranchiseVerdict
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B63/100FDD 2025

Salons by JC — Litigation & Risk

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

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Lower Risk

No litigation cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
63 / 100
FranchiseVerdict composite
Rating
MODERATE
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
20
Government-backed loans issued
Default rate
5.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
1 loans
Loans charged off or defaulted
Total loan volume
$11.5M
Avg loan size
$577K
Participating lenders
10

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

What drove the 63/100 rating

Risk Score Breakdown

  1. 01MINORNo Item 19 (Average Unit Volume) disclosure limits ability to assess profitability; only average revenue provided without net income
  2. 02MINORHigh initial investment ($1.33M–$2.04M) paired with modest average revenue ($534,950) creates tight margin for error and long payback period
  3. 03MINORUnprotected territory allows franchisor to open competing units nearby, directly cannibalizing franchisee revenue
  4. 04MINORRoyalty structure (5.5% of gross sales or $500/month minimum) creates fixed costs that burden low-revenue locations disproportionately
  5. 05MINORSlow unit growth (10.1% YoY) in mature hair salon sector suggests market saturation and slowing expansion momentum

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.