FDD Items 3 & 4 · 2022 filing

Curves litigation history

What Curves disclosed about lawsuits, arbitrations and bankruptcy in the 2022 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: 7; 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: 2022; Disclosures cover the prior ten years

Extracted from the 2022 Franchise Disclosure Document

Item 3: litigation

7 cases: 1 consumer class action (email spam, settled $15k); 1 franchisee class action (fraud/misrepresentation, settled ~$11,765/plaintiff); 1 former franchisee action (dismissed on appeal pending); 1 former franchisee breach of support claim (pending); 3 plaintiff suits by Curves NA against former franchisees for non-payment (default judgments obtained).

Item 3 (litigation) · 7 matters disclosed · 2 pending listed

Litigation cases

The franchisor and its predecessor

Pending (2)

BV Boomers, Inc. and Tonya Grandmaiter v. Curves NA, Inc. ET AL.
pending
Brought by a franchisee · filed 2020-08-21 · District Court, 414th Judicial District, McLennan County, Texas · 2020-2624-5
“… Cause No. 2020-2624-5 filed in the District Court 414th Judicial District, McLennan County, Texas.”Page 9 of the 2022 FDD, Item 3
Outcome: “On November 20, 2020, Curves moved to dismiss the amended Petition. The motion is pending before the Court. No hearing date has been set.”
Bonita Arruda, ET AL. v. Curves International, Inc. ET AL.
pending
Brought by a franchisee · Curves International, Inc. · filed 2020-02-07 · United States District Court, Western District of Texas, Waco Division; U.S. Court of Appeals for the Fifth Circuit · 6:20-CV-00092-ADA-JCM
“… Case No. 6:20-CV-00092-ADA-JCM filed in United States District Court Western District of Texas.”Page 9 of the 2022 FDD, Item 3
Outcome: “The Court has not yet issued an opinion or set the matter for oral argument. Jury trial is set for July 25, 2022.”

Concluded (5)

Curves NA, Inc. v. Bonnellie Group, LLC & Nell Nguyen, Individually
concluded
Brought by the franchisor · filed 2021-10-01 · 414th Judicial District of McLennan County, Texas · 2021-30454-5
“… Cause No. 2021-30454-5 in the 414th Judicial District of McLennan County, Texas.”Page 9 of the 2022 FDD, Item 3
Outcome: “On April 22, 2022, a Default Judgment was granted to US against Bonnellie Group, LLC & Nell Guyen, Individually for $5,390.00 in actual and liquidated damages plus interest, $1,637.75 in attorney and $314.00 in court cost.”
Curves NA, Inc. v. Christopher M. Lotey, Individually and D/B/A Mohawk Valley Curves
concluded
Brought by the franchisor · filed 2021-10-04 · County Court of Law Number 3, McLennan County, Texas · 20211034CV3
“… Cause No. 20211034CV3 filed in the County Court of Law Number 3, McLennan County, Texas.”Page 9 of the 2022 FDD, Item 3
Outcome: “On May 6, 2022, a default judgment was granted to Us against Mr. Lotey for $13,289.50 for liquidated damages plus interest, attorney fees and $314.00 court cost.”
Anne Armstrong, et al. v. Curves International, Inc., et al.
concluded
Brought by a franchisee · Curves International, Inc. · filed 2015-06-01 · Circuit Court of the County of St. Louis, Missouri; U.S. District Court, Eastern District of Missouri; U.S. District Court, Western District of Texas, Waco Division · 15SL-CC01852; removed as 4:15-cv-01006-TCM; transferred as 6:15-cv-00294-WSS
“… Case No. 15SL-CC01852 filed in the Circuit Court of the County of St. Louis, State of Missouri. On June 1, 2015, an action was filed against Curves International,”Page 8 of the 2022 FDD, Item 3
Outcome: “This lawsuit went to trial on April 10, 2017. The jury returned a verdict in favor of the plaintiffs. The parties entered a settlement agreement wherein Curves International, Inc. settled with each plaintiff for approximately an average of $11,765.” (page 9)
Harold M. Hoffman, et al v. Curves International, Inc.
concluded
Brought by a third party · Curves International, Inc. · filed 2015-01-12 · Superior Court of New Jersey, Bergen County - Law Division · BER-L-229-15
“… Docket No. BER-L-229-15; In the Superior Court of New Jersey Bergen County”Page 8 of the 2022 FDD, Item 3
Outcome: “On December 8, 2015, the parties entered an agreement wherein Curves International, Inc. paid a settlement amount of $15,000 to Plaintiff.”
Curves NA, Inc. v. Perrault, LLC and Virginia Lee Halvorsen, Individually
concluded
Brought by the franchisor · 414th Judicial District of McLennan County, Texas · 2020-3812-5
“… Cause No. 2020-3812-5 in 414th Judicial District of McLennan County, Texas . We filed suit against a former franchisee seeking recovery damages plus interest for breach of contract (non-payment of fees).”Page 9 of the 2022 FDD, Item 3
Outcome: “On April 22, 2022, a Default Judgment was granted to Us against Mrs. Halvorsen for $12,678.65 in actual and liquidated damages plus interest, $3,132.75 in attorney’s fees and $314.00 in court cost.”

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

Multiple litigation patterns: class action for customer privacy violations, breach of contract suits from franchisees, and default judgments suggest systemic franchisor-franchisee relationship problems

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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