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A49/100FDD 2025

Spavia — 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
49 / 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
46
Government-backed loans issued
Default rate
8.0%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
2 loans
Loans charged off or defaulted
Total loan volume
$20.2M
Avg loan size
$439K
Participating lenders
20

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

What drove the 49/100 rating

Risk Score Breakdown

  1. 01MEDNo Item 19 (Financial Performance Representations) disclosed — unable to verify claimed average revenue of $1.08M and net income of $236K
  2. 02MEDModest unit growth of 7.3% YoY with only 59 locations suggests limited brand momentum or market saturation
  3. 03MINORHigh initial investment ($496K–$796K) paired with 6% royalty creates significant break-even pressure; net income of $236K leaves thin margin for error
  4. 04HIGHGoing Concern status is FALSE — unclear if this indicates franchisor stability concerns or is a data error; requires immediate clarification
  5. 05HIGHNo litigation disclosed is positive, but combined with lack of financial transparency raises questions about disclosure completeness

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.