FDD Items 3 & 4 · 2023 filing
Chili’s Grill & Bar litigation history
What Chili’s Grill & Bar disclosed about lawsuits, arbitrations and bankruptcy in the 2023 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
- 1
- Item 3, as counted in the filing
- Largest disclosed settlement
- None stated
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2023
- Disclosures cover the prior ten years
Extracted from the 2023 Franchise Disclosure Document
Item 3: litigation
One consolidated putative class action (In re: Brinker Data Incident Litigation) arising from a 2018 cybersecurity incident at company-owned Chili's restaurants involving customer payment card information. Plaintiffs seek monetary damages exceeding $5 million. Awaiting Eleventh Circuit ruling on class certification.
Disclosure signals that moved the score
How this shows up in the verdict
- Major data breach litigation ('In re: Brinker Data Incident Litigation') with four consolidated class actions creates reputational and financial liability exposure for franchisees
- High investment range ($1.8M–$6.5M) with low franchise fee ($60K) suggests capital-intensive operations and thin margins relative to system-wide litigation risk
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?