FDD Items 3 & 4 · 2024 filing
Bombshells Restaurant & Bar litigation history
What Bombshells Restaurant & Bar 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
- $2.2M
- 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 settled matters involving parent RCI Hospitality Holdings, Inc. and CEO Eric Langan: (1) shareholder derivative action settled Oct 2023 for $1.2M in attorneys' fees; (2) securities class action settled Aug 2022 for $2.2M; (3) SEC administrative proceeding settled Sep 2020 for $600K total
Disclosure signals that moved the score
How this shows up in the verdict
- Going concern status indicates parent company financial distress despite $4.6M avg unit revenue
- Three major litigation settlements totaling $4M+ involving shareholder derivative, securities class action, and SEC penalties suggest governance/compliance failures at corporate level
- SEC settlement regarding executive compensation and related party transactions suggests potential misuse of franchisor resources
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?