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A41/100FDD 2024

Sharkey’s Cuts for Kids — Litigation & Risk

Personal Services - Beauty & Salon · 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
41 / 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
132
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
3 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
Connecticut
State whose law governs disputes — relevant if you're not based there

What drove the 41/100 rating

Risk Score Breakdown

  1. 01MEDNo average net income disclosed (Item 19 missing) — impossible to validate ROI claims or profitability benchmarks
  2. 02HIGHTwo litigation cases including 2022 settlement over breach of pre-opening obligations — suggests franchisor may not deliver promised support
  3. 03MINORHigh initial investment ($189K-$299K) paired with substantial monthly royalties ($1K-$1.75K) creates significant fixed cost burden with unproven return
  4. 04MINOR17.6% YoY unit growth appears healthy but modest in children's services sector; no multi-year trend data provided
  5. 05MINOR2014 Virginia Consent Order for unregistered franchise sales indicates historical compliance issues with franchise regulations

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.