FDD Items 3 & 4 · 2025 filing
Ace Hardware Painting Services litigation history
What Ace Hardware Painting Services disclosed about lawsuits, arbitrations and bankruptcy in the 2025 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
- $650K
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
No litigation required to be disclosed involving the franchisor. Three concluded actions involving ultimate parent Ace Hardware Corporation were disclosed: (1) Ace Handyman Services, Inc. v. Ace Hardware Corp. et al. (trademark; settled 2020, $150,000 paid to plaintiff); (2) Cathay Bank v. Ace Hardware Corp. et al. (vendor/fraudulent payment claims; settled 2022, $650,000 paid by Ace Hardware); (3) Advanced Caregivers LLC d/b/a Hialeah Ace Hardware v. Ace Hardware Corp. (Illinois Franchise Disclosure Act/fraud class claims; settled 2017 at $25,000 each, dismissed with prejudice).
Disclosure signals that moved the score
How this shows up in the verdict
- Parent company litigation history includes fraud and disclosure violation allegations, creating reputational and legal exposure
- Going Concern status as 'False' indicates potential financial instability at corporate level
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?