FDD Items 3 & 4 · 2026 filing
Hi-5 Aba litigation history
What Hi-5 Aba 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
- 2
- Item 3, as counted in the filing
- Largest disclosed settlement
- $145K
- 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
(1) New Age Real Estate Developers Ltd. v. Cornerstone Investments Ghana Ltd. et al. (Ghana High Court, Suit No. CM/0309/2016) - lease/equipment dispute involving CEO David Maddox in capacity as Managing Director of affiliate CIG, pending. (2) Hi-5 ABA, Inc., Hi-5 ABA Processing, Inc. and ABC Behavior v. Educational Behavior Support Services, LLC and Keith Beltton (E.D. Va., Case No. 1:25-cv-01157-PTG-WEF) - franchisor and affiliates suing former franchisee and owner for amounts due under franchise/related agreements.
Disclosure signals that moved the score
How this shows up in the verdict
- Going Concern status is FALSE — indicates potential financial distability of franchisor
- Founder David Maddox involved in pending litigation ($145k+ dispute in Ghana) — raises governance and character concerns
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?