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B63/100FDD 2025

Woodhouse Spa — 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
63 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID

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 63/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is False — franchisor may have financial/operational viability issues
  2. 02MINORNo net income disclosure (Item 19) — cannot assess actual franchisee profitability despite $2.5M average revenue
  3. 03HIGHLitigation history shows systemic issues: trade secret theft claims, non-compete breaches, and termination disputes resulting in franchisee bankruptcies
  4. 04MINORSlow unit growth (5.0% YoY) relative to investment size suggests market saturation or franchisee dissatisfaction
  5. 05MINORHigh investment range ($1.48M–$2.7M) combined with 6% royalty creates significant breakeven burden without profitability transparency

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.