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 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 5; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: None stated

Bankruptcy (Item 4): Disclosed · an officer; 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.

Item 3 (litigation) · 5 matters disclosed

Litigation cases

The franchisor

Concluded (3)

In Re: Cinnaholic Franchising, LLC v. Revel Systems Inc.
settled
Brought by the franchisor · filed 2023 · Superior Court of Fulton County, Georgia · 2023CV384522
“… Case No. 2023CV384522. Franchisor filed suit against Revel Systems in the Superior Court of Fulton County, state of Georgia alleging that Revel fraudulently induced and then materially breached a”Page 9 of the 2025 FDD, Item 3
Outcome: “The parties entered into a Confidential Settlement Agreement and Release of Claims, and this action was dismissed in August, 2024.”
In Re: Cinnaholic Franchising, LLC v. Calipto Foods, Inc.
dismissed
Brought against a franchisee · filed 2022-03-17 · Superior Court of California for Orange County · 30-2022-01250359-CU-PT-CJC
“… Case No. 30-2022-01250359-CU-PT-CJC. Franchisor terminated its Franchise Agreement with Calipto Foods, Inc. on December 30, 2021, and filed suit to compel arbitration on March 17, 2022, in the Superior Court of California for Orange County.”Page 9 of the 2025 FDD, Item 3
Outcome: “This case was dismissed without prejudice May 22, 2023. In Re: Cinnaholic Franchising, LLC v. Calipto Foods, Inc. and Philip Edwards, AAA Arbitration Case No. 01-23-0000-2264.”
In Re: Cinnaholic Franchising, LLC v. Calipto Foods, Inc. and Philip Edwards
judgment
Brought against a franchisee · American Arbitration Association · 01-23-0000-2264
“… AAA Arbitration Case No. 01-23-0000-2264. Franchisor brought a claim for breach of contract against a terminated franchisee and its guarantor.”Page 9 of the 2025 FDD, Item 3
Outcome: “The arbitration concluded on or about January 18, 2024, with an award in favor of the Franchisor for $42,234.22 in liquidated damages and in favor of the Franchisor on Respondents counter-claims.”

Parent, affiliates, master franchisor and subfranchisor

Concluded (1)

In Re: The S&Q Shack, LLC, Debtor through Paul H. Anderson, Jr., as Chapter 7 Trustee vs. H. Martin Sprock, III, Daryl Dollinger, MIBI Investment, LLC, Robert Brand, J. Rutherford Seydel, II, J. Randall Hollingsworth, Davis, Pickren, Seydel & Sneed f/k/a Davis, Pickren & Seydel, LLP, SP Investments,
settled
Brought by a third party · certain of our affiliates, officers and directors (incl. Daryl Dollinger) · filed 2012-08-24 · United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division · Adversary Proceeding No. 12-05429
“In Re: The S&Q Shack, LLC, Debtor through Paul H. Anderson, Jr., as Chapter 7 Trustee vs. H. Martin Sprock, III, Daryl Dollinger, MIBI Investment, LLC, Robert Brand, J. Rutherford Seydel, II, J. Randall Hollingsworth, Davis, Pickren, Seydel & Sneed f/k/a”Page 9 of the 2025 FDD, Item 3
Outcome: “The parties subsequently executed a settlement agreement and an order approving settlement and dismissing this proceeding followed in 2017.” (page 10)

Officers and directors (individuals, not the company)

Concluded (1)

In Re: Raving Brands, Inc., Debtor through Paul H. Anderson, Jr., as Chapter 7 Trustee vs. H. Martin Sprock, III, Daryl Dollinger, Stephen LaMastra, Flying Biscuits Franchising, Inc., Monkey Joe’s Franchising, LLC, Raving Brands Holdings, Inc., MH Group Holdings, LLC, Doc Green’s Gourmet Salads, Inc
settled
Brought by a third party · Daryl Dollinger (our CEO) · filed 2012-08-16 · United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division · Adversary Proceeding No. 12- 05417
“In Re: Raving Brands, Inc., Debtor through Paul H. Anderson, Jr., as Chapter 7 Trustee vs. H. Martin Sprock, III, Daryl Dollinger, Stephen LaMastra, Flying Biscuits Franchising, Inc., Monkey Joe’s Franchising, LLC, Raving Brands Holdings, Inc., MH Group”Page 10 of the 2025 FDD, Item 3
Outcome: “all of the defendants except for LaMastra successfully mediated the claims to a global resolution in November 2016. The parties subsequently executed a settlement agreement and an order approving settlement and dismissing this proceeding followed in 2017.” (page 11)

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.

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

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?

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