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Shubh Beauty

Shubh Franchise LLC
https://www.shubhbeauty.com
1-844-748-2423
240 E. Lake Street, Suite 210, Addison, IL 60101

How much does Shubh Beauty cost?

Initial Investment Range

$80,100 to $185,000

Franchise Fee

$10,000 to $20,000

The franchise offered is for the establishment and operation of a business that offers eyebrow threading, eyelash extension, facials, henna and partial body waxing services.

Enjoy our partial free risk analysis below

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Shubh Beauty March 28, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: August 22, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
3
2
5

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor’s 2024 audited financials show a net loss of over $60,000 and a significant drop in net worth from over $1 million to just $169,890. This was caused by a $900,000 legal settlement paid to a former business partner of the principal. This severely weakened financial position may impact the franchisor's ability to provide support or withstand future challenges. The report also notes a restatement of prior year financials, which could suggest internal control issues.

Potential Mitigations

  • Your accountant must carefully review the audited financial statements, including the notes regarding the legal settlement and prior period restatement.
  • Inquire with the franchisor about its plans to rebuild its capital base and ensure continued support for the franchise system.
  • A business advisor can help you assess if the franchisor's remaining resources are sufficient to support its rapidly growing system.
Citations: Item 21, Exhibit D (Financial Statements), Note 9 to Financial Statements

High Franchisee Turnover

Medium Risk

Explanation

Item 20 data shows a rapidly growing system that nearly doubled in size over three years. While the number of outright terminations or cessations is low (four in three years), the number of franchises transferred to new owners is increasing, with seven in 2024 alone. A high number of transfers can sometimes mask underlying issues such as franchisee unprofitability or dissatisfaction, as owners may sell rather than fail. This trend warrants further investigation during your due diligence.

Potential Mitigations

  • It is crucial to contact a significant number of current and former franchisees, especially those who transferred their business, to understand their reasons for leaving.
  • With your accountant, analyze the transfer rates in Item 20 as a percentage of the total system size to gauge the potential for hidden distress.
  • Your attorney can help you formulate precise questions for former franchisees to understand their operational and financial experiences.
Citations: Item 20

Rapid System Growth

High Risk

Explanation

The franchise system has expanded very quickly, growing from 64 to 122 outlets in three years. This rapid growth occurred while the franchisor's financial position was significantly weakened by a large legal settlement, as shown in Item 21. Such fast expansion puts a strain on a franchisor's resources, and there is a risk that the quality of training, site support, and general assistance could decline as management attention is spread thin across a larger network.

Potential Mitigations

  • A business advisor can help you assess whether the franchisor's support infrastructure seems adequate for its current size and growth rate.
  • Ask current franchisees, both new and established, about their recent experiences with the quality and responsiveness of franchisor support.
  • Your accountant should review the franchisor's financials to determine if it appears to be reinvesting sufficiently in support systems to match its growth.
Citations: Item 20, Item 21

New/Unproven Franchise System

Medium Risk

Explanation

The franchisor, Shubh Franchise LLC, began offering franchises in 2019 and was reorganized in 2021. As a relatively young franchise system, its business model, support structures, and brand recognition may not be as developed or proven as those of more mature systems. This newness, combined with its recent rapid growth and the financial impact of a large legal settlement, may present additional risks related to operational stability and long-term success.

Potential Mitigations

  • Speaking with some of the earliest franchisees in the system can provide insight into how the franchisor's support and systems have evolved over time.
  • A business advisor should help you carefully evaluate the franchisor's track record and the viability of the business model given its relatively short history.
  • Your attorney can help you understand if there are additional protections you might negotiate to offset the risks of joining a younger system.
Citations: Item 1, Item 2, Item 20

Possible Fad Business

Low Risk

Explanation

This risk was not identified in the FDD package. The business model, which focuses on established beauty services like eyebrow threading and facials, is part of a mature industry. While consumer preferences for specific treatments may change, the underlying demand for salon services is generally considered stable and not a short-term fad.

Potential Mitigations

  • When evaluating any franchise, a business advisor can help you research the long-term market trends for the specific industry to gauge its stability.
  • Always consider a business's ability to adapt to changing consumer tastes and economic conditions with help from your financial advisor.
  • Your attorney can review the franchise agreement for flexibility in adding or modifying services to adapt to market changes.
Citations: Not applicable

Inexperienced Management

Low Risk

Explanation

This risk was not identified as a major concern in the FDD package. Item 2 indicates that the key principal, Harmil Patel, has experience in a similar business since 2012 and has been involved with the affiliated company since 2017 and the franchise since its inception in 2019. While the franchise entity itself is young, the leadership appears to possess relevant industry experience.

Potential Mitigations

  • It is always wise to investigate the backgrounds of the key executives listed in Item 2 through independent research.
  • When speaking with current franchisees, ask about their perception of the management team's competence and leadership.
  • A business advisor can help you evaluate if the management team's skills align with the support needs of a growing franchise system.
Citations: Item 2

Private Equity Ownership

Low Risk

Explanation

This risk was not identified in the FDD package. The disclosures in Item 1 do not indicate that the franchisor is owned or controlled by a private equity firm. The company appears to be privately held by its principals.

Potential Mitigations

  • When reviewing any FDD, your attorney should confirm the ownership structure disclosed in Item 1 to identify any private equity involvement.
  • If a franchisor is owned by a PE firm, a business advisor can help you research that firm's history with other franchise brands.
  • Speaking with franchisees who have been through a private equity acquisition can provide valuable insight into potential changes in the system.
Citations: Not applicable

Non-Disclosure of Parent Company

Low Risk

Explanation

This risk was not identified in the FDD package. The relationship between the franchisor (Shubh Franchise LLC) and its key affiliate (Vrajhalie LLC) is disclosed in Item 1. There is no indication of a controlling parent company whose identity or financials are being withheld.

Potential Mitigations

  • Your attorney should always verify the corporate structure described in Item 1 to ensure all relevant parent and affiliate companies are properly disclosed.
  • If a parent company's guarantee is mentioned, your accountant should confirm that the parent's financial statements are included in Item 21 as required.
  • Discussing the corporate structure with a business advisor can help clarify relationships and potential hidden risks.
Citations: Not applicable

Predecessor History Issues

Low Risk

Explanation

This risk was not identified in the FDD package. Item 1 discloses the predecessor entity, Shubh Franchise Inc., and the nature of the merger. The FDD appears to be transparent about the company's lineage and discloses significant litigation involving the principals, even though it arose from a pre-franchise business relationship.

Potential Mitigations

  • Your attorney should carefully review all disclosures related to predecessors in Items 1, 3, and 4 to check for any red flags.
  • Independent online research of a predecessor entity can sometimes reveal history not fully detailed in the FDD.
  • When speaking with long-term franchisees, asking about their experience under any previous ownership can be insightful.
Citations: Not applicable

Pattern of Litigation

High Risk

Explanation

Item 3 discloses significant litigation with a former business partner that resulted in a $900,000 settlement paid by the franchisor and its principals. While presented as a pre-franchise dispute, this event had a massive financial impact, causing a net loss in 2024 and drastically reducing the company's net worth as shown in Item 21. A settlement of this magnitude, regardless of its origin, is a material event affecting the franchisor's current stability and is a significant risk.

Potential Mitigations

  • Your attorney must review the litigation disclosures in Item 3 and assess their potential impact on the franchisor's operations.
  • Have your accountant analyze the financial statements in Item 21 to understand the full effect of the settlement payment on the company's health.
  • Discuss the franchisor's stability and ability to provide support in light of this major cash outlay with a business advisor.
Citations: Item 3, Item 21, Exhibit D (Financial Statements)
2

Disclosure & Representation Risks

Total: 15
2
1
12

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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3

Financial & Fee Risks

Total: 10
1
6
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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4

Legal & Contract Risks

Total: 16
5
5
6

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

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5

Territory & Competition Risks

Total: 5
1
0
4

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

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6

Regulatory & Compliance Risks

Total: 10
4
4
2

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
0
4
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
4
7
1

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
7
8
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 1
1
0
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.