FDD Items 3 & 4 · 2023 filing

Hot Dog On A Stick litigation history

What Hot Dog On A Stick disclosed about lawsuits, arbitrations and bankruptcy in the 2023 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: 6; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: None stated

Bankruptcy (Item 4): Disclosed; Franchisor, parent, predecessor or officer

Filing year: 2023; Disclosures cover the prior ten years

Extracted from the 2023 Franchise Disclosure Document

Item 3: litigation

Six matters disclosed: one pending securities class action against FAT Brands (settled in principle for $2.5M cash + $0.5M stock); five concluded matters including Virginia franchise registration violation (settled $27,000), Shahi international MURA dispute (dismissed 2021), P&K Food Market California franchise fraud claim (dismissed 2019), Rojany/Alden securities class action (settled $50,000 individual claims), and Vignola securities class action (settled $75,000).

Item 3 (litigation) · 6 matters disclosed · 1 pending listed

Litigation cases

Parent, affiliates, master franchisor and subfranchisor

Pending (1)

Robert J. Matthews, et al., v. FAT Brands, Inc., Andrew Wiederhorn, Ron Roe, Rebecca Hershinger and Ken Kuick (In re FAT Brands Inc. Securities Litigation)
pending
Brought by a third party · FAT Brands, Inc. · filed 2022-03-18 · United States 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 2023 FDD, Item 3

Concluded (5)

Commonwealth of Virginia ex rel. State Corporation Commission v Fatburger
settled
Government or regulatory action · Fatburger · filed 2023 · Virginia State Corporation Commission, Division of Securities and Retail Franchising
“… (May 2023). This matter involves allegations by the Virginia State Corporation Commission’s Division of Securities and Retail Franchising that from December 2020 through August 2021, we offered and sold three Virginia franchises at a time when we were not effectively registered with the state.”Page 19 of the 2023 FDD, Item 3
Outcome: “We reached a settlement in principle in May 2023, without admitting or denying the allegations, and agreed to offer the affected Franchisees an opportunity to rescind their franchises, to pay $27,000 to the state, and agreed not to violate the Virginia franchise act in the future.”
Ieman Shahi vs. Fatburger North America, Inc., Andrew Alan Wiederhorn, Taylor Andrew Wiederhorn, et al
dismissed
Fatburger North America, Inc. · filed 2019-07-08 · Superior Court for the State of California for the County of Los Angeles · 19STCV23772
“… Superior Court for the State of California for the County of Los Angeles, Case No. 19STCV23772 (July 8, 2019).”Page 19 of the 2023 FDD, Item 3
Adam Vignola, et al. v. FAT Brands Inc., et al.
settled
Brought by a third party · FAT Brands Inc. · filed 2018-08-24 · United States District Court for the Central District of California · 2:18-cv-07469
“… United States District Court for the Central District of California, Case No. 2:18-cv-07469.”Page 21 of the 2023 FDD, Item 3
Outcome: “On September 25, 2020, the parties executed a Settlement Agreement and Mutual Release pursuant to which lead plaintiffs agreed to dismiss their individual claims against defendants with prejudice in exchange for a payment by or on behalf of defendants of $75,000.”
Eric Rojany, et al. v. FAT Brands Inc., et al.; Daniel Alden, et al. v. FAT Brands Inc., et al.
settled
Brought by a third party · FAT Brands Inc. · filed 2018-06-07 · Superior Court of California for the County of Los Angeles · BC708539
“Eric Rojany, et al. v. FAT Brands Inc., et al., Superior Court of California for the County of Los Angeles, Case No. BC708539, and Daniel Alden, et al. v. FAT Brands Inc., et al., Superior Court of California for the County of Los Angeles, Case No. BC716017.”Page 20 of the 2023 FDD, Item 3
Outcome: “On January 6, 2021, the parties executed a Settlement Agreement and Mutual Release pursuant to which plaintiff agreed to dismiss his individual claims against defendants with prejudice in exchange for a payment by or on behalf of defendants of $50,000.” (page 21)
P&K Food Market, Inc. vs. Buffalo’s Franchise Concepts, Inc., Fog Cutter Capital Group, Shaun Curtis, Andy Wiederhorn et al.
dismissed
Brought by a third party · Buffalo’s Franchise Concepts, Inc. · filed 2018-07-13 · Superior Court of California for the County of Los Angeles · 18STLC09534
“… Superior Court of California for the County of Los Angeles, Case No. 18STLC09534 (July 13, 2018).”Page 20 of the 2023 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.

Disclosed in the 2023 Franchise Disclosure Document

Item 4: bankruptcy

Two former FBNA affiliates (Fatburger Restaurants of California, Inc. and Fatburger Restaurants of Nevada, Inc.) filed Chapter 11 petitions on April 6, 2009 (converted to Chapter 7 June 24, 2011), with final decrees issued July 15, 2014.

Disclosure signals that moved the score

How this shows up in the verdict

Parent company FAT Brands facing active SEC securities class action litigation regarding financial reporting integrity
High litigation history including development fee disputes and restaurant sale conflicts suggests franchisor relationship issues

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?

Back to the Hot Dog On A Stick verdict Risk analysis on the brand page Franchisee contacts for due-diligence calls