FDD Items 3 & 4 · 2025 filing
Cinnaholic litigation history
What Cinnaholic 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
- 5
- Item 3, as counted in the filing
- Largest disclosed settlement
- $42K
- 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
3 franchisor-initiated suits: (1) v. Revel Systems re POS platform breach, settled Aug 2024; (2) v. Calipto Foods to compel arbitration, dismissed May 2023; (3) AAA arbitration v. Calipto Foods/Philip Edwards, award in franchisor's favor Jan 2024. 2 concluded affiliate/officer bankruptcy adversary proceedings from 2012 (S&Q Shack and Raving Brands), both settled 2017.
Disclosed in the 2025 Franchise Disclosure Document
Item 4: bankruptcy
CEO Daryl Dollinger was an officer of S&Q Shack LLC and Raving Brands Inc., both of which were placed into involuntary Chapter 7 bankruptcy in 2010. Adversary proceedings settled November 2016 with dismissal orders in 2017.
Disclosure signals that moved the score
How this shows up in the verdict
- Going Concern status is FALSE — franchisor may have material financial/operational uncertainty
- Active franchisor-initiated litigation against POS vendor and franchisee suggests operational/contractual conflicts
- Prior CEO litigation involving bankruptcy trustee raises governance and fiduciary credibility concerns
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?