FDD Items 3 & 4 · 2024 filing
CBD American Shaman litigation history
What CBD American Shaman 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 & 4 at a glance
What the filing discloses
- Cases disclosed
- 4
- Item 3, as counted in the filing
- Largest disclosed settlement
- 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
1 pending AAA arbitration by former franchisee Vitality/Johancsik seeking $500K-$1M claiming FTC Rule violations, fraud, and various contract/statutory claims. 3 government actions: Wisconsin Consent Order (May 2021) for selling franchise after expired registration and failing to disclose officer bankruptcy; Washington State charges (June 2021) for same; California Consent Desist and Refrain Order (February 2022) for same. FDA Warning Letter to affiliate CBDAS (November 2022) for CBD-infused edible marketing.
Disclosure signals that moved the score
How this shows up in the verdict
- Going concern status indicates potential financial distress at corporate level, threatening support and franchisor stability
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?