FDD Items 3 & 4 · 2026 filing
El Pollo Loco litigation history
What El Pollo Loco disclosed about lawsuits, arbitrations and bankruptcy in the 2026 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
- 6
- Item 3, as counted in the filing
- Largest disclosed settlement
- $20.0M
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2026
- Disclosures cover the prior ten years
Extracted from the 2026 Franchise Disclosure Document
Item 3: litigation
No pending litigation or franchisor-initiated litigation disclosed. Six concluded matters: (1) Galustyan/Diep shareholder derivative actions re: 2015 alleged misrepresentations, settled/dismissed; (2) Lancaster Lawsuit (Handlers-Bryman/Bryman) re: territorial encroachment, jury verdict for plaintiffs, settled for $2.5M plus protected-territory language; (3) Olvera/Perez/Vega/Gonzalez consolidated CA labor class actions, settled for $16.3M; (4) Turocy/Huston consolidated federal securities class action, settled for $20M; (5) San Bernardino Lawsuit (EPL v. EPL 3766) breach of contract, settled with no payment; (6) EPL v. MIK Food trademark infringement, EPL obtained injunction and fee award.
Disclosure signals that moved the score
How this shows up in the verdict
- Extensive multi-front litigation including shareholder derivative actions alleging breach of fiduciary duty, securities fraud, labor law violations, and territorial disputes signals governance and operational problems
- False Going Concern status indicates the franchisor has serious financial or operational viability questions
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?