FDD Items 3 & 4 · 2025 filing

Da Vi Nails / Em Lash Studio litigation history

What Da Vi Nails / Em Lash Studio 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: 4; Item 3, as counted in the filing

Largest disclosed settlement: $20K; As stated in Item 3

Bankruptcy (Item 4): None; Franchisor, parent, predecessor or officer

Filing year: 2025; Disclosures cover the prior ten years

Extracted from the 2025 Franchise Disclosure Document

Item 3: litigation

Virginia 2008 settlement (SEC-2008-00066) for unregistered franchise sales; Virginia 2018 settlement (SEC-2017-0065) for selling one franchise without current FDD; California 2009/2012 Desist and Refrain Order for franchise law violations; California 2018 Consent Decree for unregistered franchise sales. All involve regulatory/state enforcement actions.

Item 3 · 4 cases disclosed

Litigation cases

Commonwealth of Virginia, Division of Securities and Retail Franchising v. Da Vi Nails
settled
Government action · filed 2018 · Virginia State Corporation Commission
After investigation, Virginia alleged that in April 2017 Da Vi Nails sold one franchise in Virginia while its state registration had lapsed and without providing a current Franchise Disclosure Document. Without admitting or denying the allegations, Da Vi Nails settled by paying $21,000 and offering rescission to the affected franchisee.
Outcome:New Settlement Order; Da Vi Nails agreed to pay $20,000 in monetary penalties plus $1,000 in investigation costs and to extend a rescission offer to the affected purchaser.
Settlement:$21,000
In the matter of Da Vi Nails (California Division of Business Oversight Consent Decree)
settled
Government action · filed 2018 · California Division of Business Oversight
Da Vi Nails entered a Consent Decree with the California Division of Business Oversight requiring it and its managers to desist and refrain from offering or selling unregistered franchises. The company paid a $3,000 fine and is currently registered in California.
Outcome:Consent Decree dated October 26, 2018; Da Vi Nails and its managers ordered to desist and refrain from the offer and sale of unregistered franchises and paid a $3,000 fine.
Settlement:$3,000
In the matter of DaVi Nails International, LLC, David Truong and Vi Cao
settled
Government action · filed 2009 · California Corporations Commissioner
The California Corporations Commissioner issued a Desist and Refrain Order against Da Vi International, David Truong, and Vi Cao for selling franchise licenses and subleases without registering under the California Franchise Investment Law. A second 2012 order over three additional 2009 violations was resolved by stipulation with a $7,500 fine.
Outcome:Desist and Refrain Order issued February 25, 2009; additional Citations and Desist and Refrain Order issued July 30, 2012, resolved by Stipulation on August 13, 2012 with payment of a $7,500 fine.
Settlement:$7,500
Commonwealth of Virginia, ex rel. State Corporation Commission v. Da Vi Nails International, LLC and David Truong
settled
Government action · filed 2008 · Virginia State Corporation Commission
The Virginia Division of Securities and Retail Franchising alleged Da Vi Nails and David Truong offered or granted franchises in Virginia without first registering and without providing required disclosure documents. The defendants neither admitted nor denied the allegations and settled by paying $8,500 in penalties plus $750 in investigation costs.
Outcome:Settlement Order; Defendants agreed to pay $8,500 in monetary penalties plus $750 in investigation costs, provide each Virginia franchisee with a copy of the Settlement Order, and agree not to violate the Act in the future. Final Order entered August 28, 2008.
Settlement:$9,250

Disclosure signals that moved the score

How this shows up in the verdict

Significant regulatory litigation in major markets (Virginia, California) for franchise law violations including unregistered offerings and failure to provide disclosure documents
Going concern status indicates potential financial instability of the franchisor itself

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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