FDD Items 3 & 4 · 2026 filing

Caring Transitions litigation history

What Caring Transitions 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: 4; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $5K; 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

Commonwealth of Virginia v. F.C. Franchising Systems (affiliate, settled 2021); CA Commissioner v. CTFSI and affiliates (personal bankruptcy non-disclosure, consent order 2021); CA Commissioner v. CTFSI and affiliates (CPA registration issue, $5,000 penalty, consent order 2021); LaBarbera v. C.T. Franchising Systems (SC Business Opportunity Act, dismissed 2025)

Item 3 (litigation) · 4 matters disclosed

Litigation cases

The franchisor

Concluded (3)

LaBarbera v. C.T. Franchising Systems, Inc.
dismissed
Brought by a franchisee · filed 2024-12-27 · Horry County Court of Common Pleas, South Carolina (removed to D.S.C.) · 2024-cp-26-08455; 4:25-cv-00477-SAL
“… Case No. 2024-cp-26-08455 (Horry Cty. Ct. Com. Pleas Dec. 27, 2024). An individual principal of a franchisee filed an action alleging that C.T.”Page 11 of the 2026 FDD, Item 3
Commissioner of Financial Protection and Innovation v. F.C. Franchising Systems, Inc.; G.C. Franchising Systems, Inc.; C.T. Franchising Systems, Inc.; T.B. Franchising Systems, Inc.; Pet Wants Franchise System, LLC (December 2021)
concluded
Government or regulatory action · filed 2021-12-13 · California Department of Financial Protection and Innovation
“We and our affiliates entered into a Consent Order with the California Commissioner of Financial Protection and Innovation on December 13, 2021 acknowledging that the certified public accountant that audited our financial statements was not registered as a public accounting firm in Ohio as required by Ohio accounting regulations.”Page 11 of the 2026 FDD, Item 3
Outcome: “we agreed to pay an administrative penalty of $5,000 and to comply with the Corporations Code. We received reimbursement from the CPA.”
Commissioner of Financial Protection and Innovation v. F.C. Franchising Systems, Inc.; G.C. Franchising Systems, Inc.; C.T. Franchising Systems, Inc.; T.B. Franchising Systems, Inc.; Pet Wants Franchise System, LLC (July 2021)
concluded
Government or regulatory action · filed 2021-07-20 · California Department of Financial Protection and Innovation
“We and our affiliates entered into a Consent Order with the California Commissioner of Financial Protection and Innovation on July 20, 2021 resulting from an officer/director’s failure to inform us of a 2012 personal bankruptcy filing.”Page 11 of the 2026 FDD, Item 3

Parent, affiliates, master franchisor and subfranchisor

Concluded (1)

Commonwealth of Virginia v. F.C. Franchising Systems, Inc.
settled
Government or regulatory action · F.C. Franchising Systems, Inc. d/b/a Fresh Coat (affiliate) · Virginia State Corporation Commission, Division of Securities and Retail Franchising · SEC-2020-00036
“… Case No. SEC-2020-00036. Our affiliate, F.C. Franchising Systems, Inc. dba Fresh Coat (“FCFSI”), entered into a Settlement Order with the Virginia State Corporation Commission's Division of Securities and Retail Franchising on March 3, 2021.”Page 11 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.

Disclosure signals that moved the score

How this shows up in the verdict

Regulatory litigation from Virginia and California involving undisclosed officer bankruptcies and auditor registration failures, suggesting governance and transparency issues at corporate level

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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