FDD Items 3 & 4 · 2023 filing
Brooklyn Dumpling Shop litigation history
What Brooklyn Dumpling Shop disclosed about lawsuits, arbitrations and bankruptcy in the 2023 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
- $500K
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2023
- Disclosures cover the prior ten years
Extracted from the 2023 Franchise Disclosure Document
Item 3: litigation
5 concluded actions all naming CEO Stratis Morfogen (and some others) as defendants related to prior business concepts unrelated to this franchise: trademark/unfair competition ($500K award), wage/hour settlements (FLSA/NYLL). Franchisor BDS Franchising, LLC was not a named party.
Disclosed in the 2023 Franchise Disclosure Document
Item 4: bankruptcy
Officer Stratis Morfogen subject to two involuntary bankruptcy petitions (2013 dismissed 2014; 2014 petition discharged 2017) and one adversarial proceeding (dismissed 2015). Franchisor itself has no bankruptcy history.
Disclosure signals that moved the score
How this shows up in the verdict
- Multiple employment-related lawsuits (FLSA violations) suggest systemic labor compliance or wage-and-hour issues affecting franchisee operations
- Trademark infringement/unfair competition litigation involving officers/principals raises brand integrity and leadership credibility concerns
- Going Concern status = False suggests parent company may face financial viability questions
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?