FDD Items 3 & 4 · 2025 filing
BurgerFi litigation history
What BurgerFi 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
- 4
- Item 3, as counted in the filing
- Largest disclosed settlement
- $1.4M
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
Four disclosed matters: (1) DAJA I, LLC v. BurgerFi International - franchisee fraud/misrepresentation claims over 11-unit development, settled 2020 with franchisee surrendering claims and a restaurant; (2) Burger Guys entities v. BurgerFi International - fraudulent inducement claims, settled April 2025 with affiliate purchasing partial interests for $1,441,317; (3) US v. Happy Asker, Maher Bashi et al. - criminal tax fraud indictment against principals (franchisor not a party), both convicted with prison sentences and restitution; (4) Edmond Mourad et al. v. Happy's Pizza Franchise - franchise fee refund dispute, settled with $335,000 refund.
Disclosed in the 2025 Franchise Disclosure Document
Item 4: bankruptcy
Predecessor BurgerFi International and its affiliates filed Chapter 11 petitions on September 11, 2024 (Case No. 24-12017-CTG, D. Del.). System assets were sold via bankruptcy sale process, ultimately acquired by Restaurant Group (an affiliate of current franchisor) on November 27, 2024, with IP sold to BF Company; final liquidation order issued March 12, 2025.
Disclosure signals that moved the score
How this shows up in the verdict
- Going Concern status is FALSE — indicates potential solvency/viability issues at corporate level
- Multiple active litigation cases including fraud allegations, criminal indictment of officers for tax fraud conspiracy, and negligent misrepresentation claims — pattern of disputes with franchisees
- Criminal indictment against named officers (Happy Asker, Maher Bashi) for conspiracy to defraud U.S. and filing false tax returns — raises questions about corporate integrity and financial reporting accuracy
- Multiple franchisee refund disputes and fraud inducement claims suggest corporate may have misrepresented unit economics or support
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?