B56/100FDD 2025
Sugaring NYC — Litigation & Risk
Personal Services - Beauty & Salon · FDD Items 3, 4 & 5
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
56 / 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
31
Government-backed loans issued
Default rate
—
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$6.7M
Avg loan size
$217K
Participating lenders
11
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
Florida
State whose law governs disputes — relevant if you're not based there
What drove the 56/100 rating
Risk Score Breakdown
- 01MEDNo Item 19 financial performance data disclosed — impossible to validate ROI claims or benchmark unit economics
- 02HIGHActive litigation with unopened franchisee seeking partial refund suggests potential franchise fee disputes or unrealistic expectations set by franchisor
- 03MINORTrademark infringement judgment against L'Oreal indicates prior brand protection failures and potential IP vulnerability
- 04MINOR15.9% YoY unit growth is modest for a beauty services franchise — below industry average for fast-casual service concepts
- 05MINORHigh initial investment range ($138,750–$293,200) with 5% royalty but no transparency on profitability or break-even timeline
- 06HIGHGoing Concern status is False, which may indicate franchisor financial instability or prior accounting concerns
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.