Verified — real FDD extraction
SBA-eligible · directory code S2274 since 2017
SMARTSTYLE
Beauty & Personal Care · independent · est. —
SmartStyle is a chain of value hair salons, most commonly located inside Walmart stores, offering haircuts, color, and styling for the whole family without appointments. Customers get affordable, convenient cuts while shopping. A franchisee operates a salon, employing stylists and managing walk-in service.
SMARTSTYLE net unit count declined -38.2% from 2022–2025 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Showing strain
Distress
The disclosed record shows weakness — shrinking units, elevated exits, or churn — worth reading closely before going further.
Exit rate · latest year
15.9%
vs 5.4% across 23 beauty & personal care systems
Cost to open
$184K–$336K
Item 7 total investment range
SBA loan defaults
4.4%
vs 14.8% avg across rated brands
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2022–2025
Survival record
FDD Item 20 · outlet status by year
In fiscal 2025, 171 of 1,077 franchised outlets left the system — a 15.9% annualized exit rate, vs 5.4% across 23 beauty & personal care systems. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Outlets at start | 1,523 | 1,474 | 1,235 | 1,078 |
| Opened | 19 | 0 | 0 | 5 |
| Transfers | 62 | 67 | 46 | 89 |
| Terminations | 0 | 0 | 0 | 46 |
| Non-renewals | 0 | 0 | 0 | 125 |
| Reacquired by franchisor | 0 | 0 | 0 | 0 |
| Ceased — other reasons | 46 | 239 | 157 | 0 |
| Outlets at end | 1,474 | 1,235 | 1,078 | 911 |
| Net change | -49 | -239 | -157 | -167 |
The lender's view
SBA 7(a)/504 loan performance · FY1991–present
Banks have made 75 SBA-backed loans to SMARTSTYLE franchisees since 2017. Of the 45 that have resolved, 4.4% were charged off (defaulted) rather than paid in full, versus 14.8% across 576 rated brands.
4.4%
2 of 45 resolved defaulted
71.5%
avg. charged-off $ ÷ approved $
3.2%
default rate × loss severity
$716,889
what recent franchisees borrowed
58 mo
approval → charge-off, defaulted loans
4 vs 16
distinct banks — pulling back
Charge-off rate by loan approval year (%)
Loan performance by state
SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO SMARTSTYLE BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL
The owner's side of the deal
FDD × federal loan record
Who finances it
Stearns Bank National Association
32.0% of this brand's loans
That lender charges off 11.8% of its loans to other franchise brands, vs 14.8% nationally.
Who buys it
61.5%
first-time franchise owners
The rest already owned at least one other franchise. Across the corpus, brands bought mostly by repeat operators charge off at roughly 10% versus 17% for brands sold mostly to newcomers.
Does experience help here?
−7.7pp
multi-unit vs single-unit owners
Owners of multiple units default at 0.0%; single-unit owners at 7.7%.
Computed from 75 SBA 7(a)/504 loans to SMARTSTYLE franchisees joined to the brand's own FDD. Debt service assumes level amortization at the average disclosed term and rate. A lender's rate excludes its loans to this brand, so it reads the lender, not the brand.
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $40K franchise fee (Item 5) and a total investment of $184K–$336K (Item 7). The franchisor publishes no earnings claim (Item 19) — ask current and former franchisees for real numbers.
To open (Item 7)
$184K–$336K
all-in investment range
Franchise fee (Item 5)
$40K
upfront, one-time
Royalty (Item 6)
5%
of sales, ongoing
Your figure — this brand discloses no Item 19 earnings; validate with current & former owners.
Royalty you'd pay / yr
$50K
5% of sales, before profit
Over a 10-yr term
$500K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for SMARTSTYLE with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 1 wage case against operators of this system, recovering $27 in back wages for 1 worker. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
1
Back wages owed
$27
Employees affected
1
Since 2020
0
Read this carefully. The employers in these cases are individual SMARTSTYLE franchisees — separately owned businesses operating under the brand name — not SMARTSTYLE itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2010.
Modeled risk
FDD Risk Score · modeled from the public record
Modeled from the public record, this brand looks safer than 79% of systems we score.
Risk percentile
21 / 100
Loan-corroborated
Modeled SBA charge-off
8.7%
Observed SBA charge-off
4.4%
Top drivers: System size (log units) (lowers) · Share financed by high-loss lenders (lowers) · Item 3 litigation (log) (lowers) · Net unit growth (raises). 15+ resolved loans stand behind this estimate. A linear scorecard built from this brand's own disclosure figures plus the federal loan record behind its franchisees; full spec and cross-validated accuracy on the methodology page. A score is context, not a verdict.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
No recent closures, bankruptcies, or major lawsuits found in the news for SMARTSTYLE. That's a good sign — but it reflects news coverage, not a guarantee.
A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing SMARTSTYLE's numbers, including talking you out of a bad deal.
Talk to an independent CPA before you buy →SMARTSTYLE franchise questions, answered from the filings
What percentage of SMARTSTYLE franchises closed last year?
In SMARTSTYLE's latest FDD Item 20 (fiscal 2025), 171 of 1,077 franchised outlets left the system — an annualized exit rate of 15.9% — compared with 5.4% across 23 beauty & personal care systems tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a SMARTSTYLE franchise cost?
Per SMARTSTYLE's 2025 FDD, buying in requires an initial franchise fee of $40K (Item 5) and a total initial investment of $184K–$336K (Item 7).
What royalty does SMARTSTYLE charge?
SMARTSTYLE charges an ongoing royalty of 5.0% of gross sales, per Item 6 of its 2025 FDD.
Does SMARTSTYLE disclose earnings (Item 19)?
No — SMARTSTYLE's 2025 FDD makes no financial performance representation in Item 19. That is legal and common, but it means the franchisor publishes no earnings claim; ask current franchisees for real numbers.
How often do SBA loans for SMARTSTYLE franchises default?
Across 75 SBA-backed loans to SMARTSTYLE franchisees since 2017, 2 of the 45 that have resolved were charged off — a 4.4% default rate, versus about 14.8% across all rated franchise brands. This is the lender's-eye view of franchisee failure, drawn from public SBA 7(a)/504 FOIA data and independent of the franchisor's own disclosures.