FDD Items 3 & 4 · 2026 filing
1-800 Water Damage litigation history
What 1-800 Water Damage disclosed about lawsuits, arbitrations and bankruptcy in the 2026 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 & 4 at a glance
What the filing discloses
- Cases disclosed
- 3
- Item 3, as counted in the filing
- Largest disclosed settlement
- $5K
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2026
- Disclosures cover the prior ten years
Extracted from the 2026 Franchise Disclosure Document
Item 3: litigation
Two concluded predecessor (LLB Group/Cure Service Group) regulatory matters: a 2006 settlement with the California Corporations Commissioner over unregistered franchise sales, and a 2006 New York Assurance of Discontinuance ($4,750 paid). One franchisor action: 1-800 Water Damage International, LLC v. Restoration Rx, LLC et al. (E.D. Mich. 2:2024-cv-10110), filed Jan 2024 for breach of contract, unjust enrichment, and trademark infringement against a former franchisee; settled confidentially December 2025.
Disclosure signals that moved the score
How this shows up in the verdict
- Regulatory history: LLB Group settled with CA and NY regulators for unregistered sales and failure to disclose prior lawsuits, indicating compliance and disclosure failures
- Recent litigation against franchisee Restoration Rx LLC (settled Dec 2025) signals franchisor-franchisee disputes
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?