FDD Items 3 & 4 · 2025 filing
Happy's Pizza litigation history
What Happy's Pizza 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
- 2
- Item 3, as counted in the filing
- Largest disclosed settlement
- $335K
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- 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) US v. Happy Asker/Maher Bashi (2013 criminal tax fraud case, franchisor not a party; individuals convicted, sentenced, ordered restitution). 2) Edmond Mourad et al. v. Happy's Pizza Franchise, LLC (2015 investor suit over $335,000 franchise fee/deposit refund alleging misrepresentation about liquor license; settled, franchisor refunded $335,000).
Disclosed in the 2025 Franchise Disclosure Document
Item 4: bankruptcy
On Sept 11, 2024, BurgerFi International Inc. (predecessor of affiliate BurgerFi) and affiliates filed Chapter 11; assets ultimately sold and acquired via Restaurant Group to BurgerFi Franchise, LLC (franchisor's affiliate), confirmed by court Final Order Mar 12, 2025.
Disclosure signals that moved the score
How this shows up in the verdict
- Criminal indictment of co-founders for conspiracy to defraud U.S. and tax fraud raises fundamental integrity and leadership concerns
- Active civil litigation by investors alleging false representations about liquor licenses indicates systematic misrepresentation to franchisees
- Going Concern status is FALSE, suggesting potential financial distress or viability questions at corporate level
- Criminal defendants (Asker and Bashi) still in active management poses ongoing reputational and operational risk
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?