small frills can be a number of things, from genetics, to highly oxiginated water, to there being too much ammonia in the water. one of the first things i would do is test the water to make sure its not the ammonia burning them away, and if it is i would work on fixing it right away. Her gills look a little curlled in the picture(a sign of stress), so i would make sure its not your water quality affecting her, though it could just be from water flow or some other factor (i dont know your set up)some people have told me it could be affected by diet, an axi on worms is going to be healthier and have fluffier gills than an axi on pellets.
it worried me for the longest time because mine had small gills when i got her, i thought maybe they had been burned away a little bit from the build up ammonia from being shipped(she got delayed and was in the system for three days ;D; ). they grew back a little, but not a lot. talking with different axi owners and my breeder, it turned out to be her genetics, she looks just like her daddy. shes still a very lively gal and i love her, short gills and all.