COMMITMENTS AND CONTINGENCIES

3 Months Ended

Sep. 30, 2026

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES:

The Company is a plaintiff or defendant in various lawsuits and claims arising out of the normal course of business. Like certain other franchisors, the Company has faced allegations of franchise regulation and agreement violations. Additionally, because the Company may be the tenant under a master lease for a location subleased to a franchisee, the Company has faced allegations of non-payment of rent and associated charges. Further, similar to other large retail employers, the Company has faced, and may continue to face, allegations of purported patent, consumer, and wage and hour violations, some of which involve class actions.

In November 2025, the Company received a civil investigative demand (CID) from the U.S. Department of Justice (DOJ) issued pursuant to the False Claims Act. The investigative inquiry concerns applications for Paycheck Protection Program (PPP) loans and loan forgiveness obtained by Alline Salon Group (Alline) prior to the Company’s acquisition of Alline. The Company previously acquired Alline pursuant to the terms of the Membership Interest Purchase Agreement, dated December 19, 2024, by and among the Company, Super C Group, LLC d/b/a Alline Salon Group, ASG Holdings, LLC, Vision Cuts, LLC, SAAW Project, LLC, and VGP II, LLC. The Company is cooperating with the DOJ’s inquiry, and at this time, there has been no formal demand for the return of the PPP loan proceeds, and the Company is not aware of any formal claim or lawsuit having been initiated against the Company. Nevertheless, the Company has recorded an accrual of $2.5 million which relates to a PPP loan obtained by Alline in the principal aggregate amount of approximately $2 million which was forgiven in full by the Small Business Administration (the SBA) in December 2021, and which reflects the Company’s recent understanding as to the current focus of the inquiry. The Company is continuing to respond to additional requests for information, and while the timing of any ultimate resolution of the inquiry is uncertain, the Company is evaluating its rights to indemnification and other potential sources of recovery for any claim relating to this matter.

Litigation is inherently unpredictable, and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could incur judgments in the future or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period.