FDD Items 3 & 4 · 2026 filing
Fatburger litigation history
What Fatburger 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
- $2.5M
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2026
- Disclosures cover the prior ten years
Extracted from the 2026 Franchise Disclosure Document
Item 3: litigation
1 pending securities class action (Kates v. FAT Brands 2024); concluded cases include Virginia SCC settlements, Tatum franchise dispute (settled $40K), Matthews securities class action (settled $2.5M+stock), Vignola securities class action (settled $75K), Rojany class action (settled $50K), Shahi international development dispute (dismissed)
Disclosed in the 2026 Franchise Disclosure Document
Item 4: bankruptcy
On January 25, 2026, FAT Brands, Inc. (parent), Twin Hospitality Group Inc., and their subsidiary entities including Fatburger North America, Inc., filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas (Case No. 26-90126 ARP) to restructure corporate debt
Disclosure signals that moved the score
How this shows up in the verdict
- Multiple litigation cases including pending securities class action, franchise registration disputes, and breach of contract claims suggest systemic franchisor-franchisee relationship issues
- Going concern disclosure raises questions about franchisor financial stability and long-term support capabilities
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?