FDD Items 3 & 4 · 2024 filing
Golden Krust Caribbean Restaurant litigation history
What Golden Krust Caribbean Restaurant disclosed about lawsuits, arbitrations and bankruptcy in the 2024 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
- $1.9M
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2024
- Disclosures cover the prior ten years
Extracted from the 2024 Franchise Disclosure Document
Item 3: litigation
Three arbitration/litigation matters disclosed: (1) GK v. Clayborne – GK prevailed, awarded ~$710K; (2) Auctus/Klayrock v. GK – franchisees prevailed, GK paid $1.95M settlement; (3) Clayborne v. GK – pending arbitration as of issuance date
Item 3 (litigation) · 3 matters disclosed · 1 pending listed
Litigation cases
The franchisor
Pending (1)
Keith A, Clayborne v. Golden Krust Franchising, Inc.
pendingBrought by a franchisee · filed 2022-10-30 · American Arbitration Association; U.S. District Court for the Southern District of Florida (22-62018-CIV-DIMITROULEAS) · 01-22-0004-5853
“… Case No.: 01-22-0004-5853 (American Arbitration Association) and Case No. 22-62018-CIV-DIMITROULEAS (United States District Court for the Southern District of Florida).”Page 10 of the 2024 FDD, Item 3
Concluded (2)
Auctus Restaurant Group, Inc. and Klayrock, LLC v. Golden Krust Franchising Inc., Golden Krust Franchising Inc. v. Klayrock, LLC and Kishon Clayborne
settledBrought by a franchisee · filed 2019-08-12 · American Arbitration Association; S.D.N.Y. (20-CV-7321) · 01-19-0002-5197
“… Case No. 01-19-0002-5197 (American Arbitration Association (“AAA”)).”Page 9 of the 2024 FDD, Item 3
Outcome: “we entered into a settlement agreement dated November 24, 2021, pursuant to which we paid Klayrock and Clayborne $1,950,000 in installments as payment in full for the award and the parties exchanged mutual releases.” (page 10)
Golden Krust Franchising, Inc. v. Keith Clayborne
judgmentBrought against a franchisee · filed 2018-12-13 · Arbitration · 01-18-0004-2768
“… – Arbitration Nos. 01-18-0004-2768; 01-18-0004-2770. On December 13, 2018, we filed a Demand for Arbitration against former franchisees Keith Clayborne, Bernadette Clayborne, 7 “K” Corp., Golden Krust #6, LLC,”Page 9 of the 2024 FDD, Item 3
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
- Active litigation involving non-competition, breach of contract, and discriminatory fee practices suggests franchisor-franchisee conflict and operational inconsistency
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?