FDD Items 3 & 4 · 2026 filing

Buddy’s Home Furnishings litigation history

What Buddy’s Home Furnishings 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 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 3; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $1.6M; As stated in Item 3

Bankruptcy (Item 4): Disclosed; Franchisor, parent, predecessor or officer

Filing year: 2026; Disclosures cover the prior ten years

Extracted from the 2026 Franchise Disclosure Document

Item 3: litigation

Predecessor BFL involved in: (1) consolidated arbitration with MMS Group and Joseph Gazzo III (settled May 2024 with BFL paying $1,625,000); (2) action against Buddy Mac Holdings for post-termination non-compete violation (settled Feb 2026 pending bankruptcy court approval); (3) FTC consent order (May 2020) prohibiting reciprocal purchase agreements among rent-to-own operators. No current franchisor (BHF Franchising) litigation disclosed.

Item 3 (litigation) · 3 matters disclosed · 1 pending listed

Litigation cases

The franchisor and its predecessor

Pending (1)

Buddy’s Franchising and Licensing LLC v. Buddy Mac Holdings LLC et al.
pending
Brought against a franchisee · Buddy’s Franchising and Licensing LLC (BFL, our predecessor) · filed 2025-11-06 · 9th Judicial Circuit, Orange County, Florida (removed to the U.S. District Court for the Middle District of Florida) · 2025-CA-010986; 6:25cv2442
“… Case No. 2025-CA- 010986, 9th Judicial Circuit in and for Orange County, Florida.”Page 12 of the 2026 FDD, Item 3

Concluded (2)

MMS Group, LLC v. Buddy’s Franchising and Licensing LLC and Franchise Group, Inc.; Buddy’s Franchising and Licensing LLC v. Joseph Gazzo III a/k/a Joseph Gazzo, Bi-Rite Holdings, LLC and Buddy’s Rollco LLC (consolidated arbitration)
settled
Brought by a franchisee · Buddy’s Franchising and Licensing LLC (BFL, our predecessor) · filed 2022-11-29 · American Arbitration Association · 01-22-0004-9922; 01-23-0002-1135
“(1) MMS Group, LLC v. Buddy’s Franchising and Licensing LLC and Franchise Group, Inc., Case No. 01-22-0004-9922, American Arbitration Association; and (2) Buddy’s Franchising and Licensing LLC v. Joseph Gazzo III a/k/a Joseph Gazzo, Bi-Rite Holdings, LLC and Buddy’s Rollco LLC, Case No. 01-23-0002-1135, American Arbitration Association.”Page 12 of the 2026 FDD, Item 3
Outcome: “BFL agreed to pay to the franchisees and Mr. Gazzo $1,625,000. Predecessor-Initiated Action Buddy’s Franchising and Licensing LLC v. Buddy Mac Holdings LLC et al., Case No. 2025-CA- 010986, 9th Judicial Circuit in and for Orange County, Florida.”
In the Matter of Buddy’s Newco, LLC
concluded
Government or regulatory action · Buddy’s Newco, LLC (our predecessor; BFL also subject) · Federal Trade Commission · FTC Matter No. 191 0074
“… FTC Matter No: 191 0074. On May 11, 2020, the Federal Trade Commission (the “FTC”) issued its Final Decision and Order in connection with its civil investigation of our predecessor, Buddy’s Newco, and two other rent-to-own operators.”Page 13 of the 2026 FDD, Item 3

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Disclosed in the 2026 Franchise Disclosure Document

Item 4: bankruptcy

Predecessor entity BFL's former indirect parent Franchise Group Inc. (FRG) and affiliates including BFL filed Chapter 11 bankruptcy in Delaware on November 3, 2024 (Case No. 24-12480). Emerged from bankruptcy June 6, 2025 under confirmed plan.

Disclosure signals that moved the score

How this shows up in the verdict

Multiple material litigation matters including $1.6M settled disputes, FTC Final Order regarding reciprocal purchase agreements, and ongoing Buddy Mac Holdings settlement—pattern of franchisor-franchisee conflicts

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?

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