FDD Items 3 & 4 · 2025 filing

Fazoli's litigation history

What Fazoli's 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: 3; 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

1 pending securities class action (Kates v. FAT Brands, 2024); 2 concluded: FAT Brands securities class action (settled $3M, dismissed 2023) and Virginia SCC franchise registration violation (affiliate FBNA, settled 2023)

Item 3 (litigation) · 3 matters disclosed · 1 pending listed

Litigation cases

Parent, affiliates, master franchisor and subfranchisor

Pending (1)

Mitchell Kates v. FAT Brands, Inc., Andrew Wiederhorn, Kenneth J. Kuick and Robert G. Rosen
pending
Brought by a third party · FAT Brands, Inc. (FAT) · filed 2024-06-07 · U.S. District Court for the Central District of California · 2:24-cv-04775-MWF-MAA
“… (United States District Court for the Central District of California, Case No. 2:24-cv-04775- MWF-MAA).”Page 19 of the 2025 FDD, Item 3

Concluded (2)

In re FAT Brands Inc. Securities Litigation (consolidated Robert J. Matthews, et al. v. FAT Brands, Inc., et al., and the Chipman action)
settled
Brought by the franchisor · FAT Brands, Inc. · filed 2022-03-18 · U.S. District Court for the Central District of California · 2:22-cv-01820
“Robert J. Matthews, et al., v. FAT Brands, Inc., Andrew Wiederhorn, Ron Roe, Rebecca Hershinger and Ken Kuick (United States District Court for the Central District of California, Case No. 2:22-cv-01820).”Page 19 of the 2025 FDD, Item 3
Outcome: “In August 2022, after mediation the parties agreed to settle the litigation. Pursuant to the settlement, FAT agreed to pay on behalf of the defendants $2,500,000 in cash and $500,000 in Class A common stock of FAT to the class plaintiffs, the plaintiffs released all claims against the defendants, and the case was dismissed with prejudice in February 2023.”
Commonwealth of Virginia ex rel. State Corporation Commission v. Fatburger North America, Inc.
settled
Government or regulatory action · Fatburger North America, Inc. (FBNA) · Virginia State Corporation Commission, Division of Securities and Retail Franchising · SEC-2022-00034
“… (Case No. SEC-2022-00034, Settlement Order entered Jul. 12, 2023, Final Order entered Oct. 23, 2023).”Page 20 of the 2025 FDD, Item 3
Outcome: “to pay $27,000 to the Commonwealth of Virginia; and (3) not to violate the Virginia franchise law in the future. On July 12, 2023, the Virginia State Corporation Commission entered a settlement order with FNBA.”

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

FAT Brands and subsidiaries including Fazoli's Franchising Systems, LLC filed voluntary Chapter 11 petitions January 25, 2026 in U.S. Bankruptcy Court for the Southern District of Texas, Case No. 26-90278 (ARP) for FFS LLC

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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