FDD Items 3 & 4 · 2026 filing
Ace Sushi litigation history
What Ace Sushi 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
- 5
- Item 3, as counted in the filing
- Largest disclosed settlement
- $16K
- 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
Item 3 discloses 5 actions: (1) Maryland Securities Division determination/consent order that AMG's Contracts for Services were unregistered franchises (2004-2005); (2) Rhode Island determination of franchise-law violation, $5,000 fine (2005); (3) Virginia State Corporation Commission action, $1,500 investigation costs + $15,600 penalty (2005-2006); (4) Washington DFI Securities Division consent order, $600 reimbursement (2006); and (5) Ngung Sang v. Ace Sushi Franchise Corp. (Iowa small claims, 2021), a former franchisee breach/fraud claim settled for $5,375 in 2022. The first four are regulatory/administrative orders against AMG (and Ace) relating to pre-franchise Contracts for Services; the fifth is a private franchisee small-claims action. "Other than these 5 actions, no litigation is required to be disclosed."
Disclosure signals that moved the score
How this shows up in the verdict
- Going concern status is FALSE — indicates potential financial instability or insolvency risk at corporate level
- 4 state regulatory orders (MD, RI, VA, WA) for franchise registration/disclosure violations suggest systemic compliance failures and potential fraud risk
- 1 franchise closure with small claims litigation suggests unit failure and potential payment disputes with franchisor
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?