FDD Items 3 & 4 · 2023 filing
Jackson Hewitt Tax Service litigation history
What Jackson Hewitt Tax Service 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 & 4 at a glance
What the filing discloses
- Cases disclosed
- 13
- Item 3, as counted in the filing
- Largest disclosed settlement
- $400K
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2023
- Disclosures cover the prior ten years
Extracted from the 2023 Franchise Disclosure Document
Item 3: litigation
Pending: (1) Lematta/Casper IPO class action involving CEO Macfarlane (pre-employment); (2) Robinson antitrust class action alleging employee no-poach conspiracy; (3) Zaidi breach of contract/post-termination. Franchisor-initiated FY2023: 7 suits against former franchisees for trademark/post-termination/amounts owed. Concluded: NJ False Claims Act settled $400K; Lomeli consumer fraud settled $100K; 1040 Inc. 94-franchisee incentive payment dispute settled $350K.
Disclosure signals that moved the score
How this shows up in the verdict
- Litigation portfolio reveals recurring business model issues: state investigations into grant programs, class actions over customer fees, franchisee disputes over incentives, and antitrust no-poach provisions suggest systemic franchisor-franchisee tension
- Tax preparation is highly seasonal (peak Dec-Apr) creating cash flow and staffing challenges; no going concern status suggests franchisor stability questions
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?