FDD Items 3 & 4 · 2024 filing

Carl's Jr. litigation history

What Carl's Jr. 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 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 6; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: None stated

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

6 concluded matters: (1) 6Points Food Services v. CJR – franchise rescission/breach, settled $5.5M USD; (2) Harris v. CJ Star/CJR – anti-trust/no-hire, settled $25K; (3) Rice v. By The Rio/CJR – anti-trust/no-hire, settled $10K; (4) CA v. Arby's (affiliate) – no-poaching; (5) CA v. Dunkin' Brands (affiliate) – no-poaching; (6) NY v. Dunkin' Brands (affiliate) – data breach, $650K penalty.

Item 3 (litigation) · 6 matters disclosed

Litigation cases

The franchisor

Concluded (3)

Larry Rice v. By The Rio, LLC, Carl’s Jr. Restaurants LLC, and DOES 1-10
concluded
Brought by a franchisee · filed 2019-01-15 · United States District Court, District of Colorado · 1:19-cv-00129-STV
“… (United States District Court, District of Colorado, Case No 1:19-cv-00129-STV, filed January”Page 23 of the 2024 FDD, Item 3
Outcome: “On or about April 1, 2019, the parties reached an agreement to settle the litigation with the following terms: (a) Defendants will”
Ashlie Harris v. CJ Star, LLC, Carl’s Jr. Restaurants LLC, and DOES 1-10
concluded
Brought by a franchisee · filed 2018-08-03 · United States District Court, Eastern District of Washington, Spokane Division · 2:18-cv-00247
“… (United States District Court, Eastern District of Washington, Spokane Division, Case No”Page 22 of the 2024 FDD, Item 3
Outcome: “The Court granted the parties’ stipulated motion to dismiss the case on April 23” (page 23)
6Points Food Services Ltd. v. Carl’s Jr. Restaurants LLC, et al.
concluded
filed 2015-12-23 · Superior Court of Justice, Ontario · 15-543370
“6Points Food Services Ltd. v. Carl’s Jr. Restaurants LLC, et al., No.”Page 21 of the 2024 FDD, Item 3
Outcome: “The Court granted the parties’ stipulated motion to dismiss the case on October 14” (page 22)
Within this matter, as the filing narrates it
- 6Points Food Services Ltd. v. CKR, Ned Lyerly, Jr., Michael Woida and Jeff Branton
  concluded
  names an affiliate · CKE Restaurants Holdings, Inc. and named officers · filed 2016-02-11 · Superior Court of Justice, Ontario · 16-546487
  “On February 11, 2016, 6Points filed an action in the Ontario Superior Court of Justice against CKR, Ned Lyerly, Jr., Michael Woida and Jeff Branton (court file no. 16-546487).”Page 22 of the 2024 FDD, Item 3
  Outcome: “On August 8, 2016, the Court ordered that the two actions described above are consolidated into a single”
Counted as one matter, the way Item 3 groups it.

Parent, affiliates, master franchisor and subfranchisor

Concluded (3)

New York v. Dunkin’ Brands, Inc.
concluded
Government or regulatory action · Dunkin Brands, Inc. · filed 2019-09-26 · N.Y. Supreme Court for New York County · 451787/2019
“… (N.Y. Supreme Court for New York County, Case No. 451787/2019, filed September 26, 2019). In this matter, the N.Y.”Page 24 of the 2024 FDD, Item 3
Outcome: “On September 21, 2020, without admitting or denying the NYAG’s allegations, DBI and the NYAG entered into a consent agreement to resolve the State’s complaint.”
The People of the State of California v. Arby’s Restaurant Group, Inc.
concluded
Government or regulatory action · Arby’s Restaurant Group, Inc. · filed 2019-03-19 · California Superior Court, Los Angeles County · 19STCV09397
“… (California Superior Court, Los Angeles County, Case No. 19STCV09397, filed March 19, 2019).”Page 23 of the 2024 FDD, Item 3
Outcome: “Under the settlement agreement ARG paid no money but agreed (a) to remove the disputed provision from its franchise”
The People of the State of California v. Dunkin’ Brands, Inc.
concluded
Government or regulatory action · Dunkin Brands, Inc. · filed 2019-03-19 · California Superior Court, Los Angeles County · 19STCV09597
“… (California Superior Court, Los Angeles”Page 23 of the 2024 FDD, Item 3
Outcome: “the action was closed after the court approved the parties’ stipulation of” (page 24)

One proceeding above is indented under the matter it belongs to because the filing narrates them inside it — an appeal, a consolidated case, a related arbitration. Each carries its own quote and page. They are counted with their matter, not as extra matters, so this list and the 6 Item 3 discloses agree.

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

Material litigation history including Canadian disclosure violations, non-compete enforcement actions, and cybersecurity breaches affecting franchisee reputation

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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