FDD Items 3 & 4 · 2024 filing
5 Star Nutrition litigation history
What 5 Star Nutrition disclosed about lawsuits, arbitrations and bankruptcy in the 2024 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
- $4.5M
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2024
- Disclosures cover the prior ten years
Extracted from the 2024 Franchise Disclosure Document
Item 3: litigation
Three matters disclosed: (1) Cranor v. 5 Star Nutrition, LLC (W.D. Tex.) TCPA putative class action, settled confidentially and dismissed with prejudice July 2021; (2) Environmental Research Center, Inc. v. Brick & Mortar Distributing/5 Star Nutrition (Cal. Super. Ct., Alameda) Proposition 65 action, settled via Consent Judgment entered March 2019, $100,000 paid plus warning/testing obligations; (3) United States v. Defyned Brands a/k/a 5 Star Nutrition, LLC (W.D. Tex.) FDA misbranding criminal case against parent/affiliate, resolved by Dec 2023 plea agreement with guilty plea to three misdemeanors and $4.5 million penalty paid over 90 monthly installments.
Disclosure signals that moved the score
How this shows up in the verdict
- Going concern status is FALSE, indicating potential financial instability or restructuring at corporate level
- Multiple serious litigations including TCPA class action, Prop 65 product safety violations, and federal misdemeanor plea for misbranding dietary ingredients—core product integrity issues
- Federal criminal plea agreement (USA v. Defyned Brands) for misbranding suggests regulatory compliance failures affecting the supplement/nutrition category
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?