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B61/100FDD 2025

Supercuts — Litigation & Risk

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

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Elevated Risk

11 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
11
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
61 / 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
258
Government-backed loans issued
Default rate
3.2%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
7 loans
Loans charged off or defaulted
Total loan volume
$72.1M
Avg loan size
$280K
Participating lenders
56

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

What drove the 61/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit growth (7.0% YoY) suggests market saturation or franchisee underperformance in mature hair-cutting segment
  2. 02MINORMultiple franchise law violation counterclaims indicate systemic disputes over franchisor obligations and franchisee rights
  3. 03MEDNo disclosed average net income despite $322k avg revenue creates inability to validate unit economics or profitability claims
  4. 04MINORUnprotected territory allows franchisor to cannibalize franchisee revenue through company-owned or competing franchise locations
  5. 05HIGHLitigation pattern (collections, trade secret misappropriation, consumer class action) suggests operational and compliance issues
  6. 06MEDHigh royalty burden (6% on gross sales, not net profit) combined with undisclosed net income obscures true franchise profitability

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.