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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 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed
13
Item 3, as counted in the filing
Largest settlement, franchisor's own cases
None stated
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.

Item 3 (litigation) · 13 matters disclosed · 3 pending listed

Litigation cases

The franchisor

Pending (2)

  • Jackson Hewitt Inc. v. Usman A. Zaidi I, Usman Ali Zaidi, and Syeda Zaidi

    pending

    Brought by the franchisor · filed 2022-04-22 · United States District Court for District of New Jersey · 2:22-cv-02351-JMV-LDW

    “… (Case No. 2:22-cv-02351-”Page 13 of the 2023 FDD, Item 3

    Outcome: “Fact discovery closed on June 1, 2023. The court has not yet set a trial date or pre-trial schedule.” (page 14)

  • Jessica Robinson v. Jackson Hewitt Inc. and Tax Services of America, Inc.

    pending

    Brought by a third party · filed 2019-01-24 · United States District Court for the District of New Jersey, originally the Eastern District of Virginia · 2:19-cv-9066

    “… (Case No. 2:19-cv-9066; United States District Court for the District of New Jersey)”Page 13 of the 2023 FDD, Item 3

    Outcome: “On October 31, 2019, the Court granted the motion to dismiss in part, dismissing all claims prior to December 20, 2014.”

Concluded (3)

  • 1040, Inc., et al. v. Jackson Hewitt Inc.

    settled

    Brought by a franchisee · filed 2017-12-21 · Superior Court of New Jersey, Law Division, then arbitration · L-005179-17

    “… (Case No. L-005179-17; Superior Court of New Jersey, Law Division)”Page 15 of the 2023 FDD, Item 3

    Outcome: “The parties completed the execution of the settlement agreement on August 5, 2020 and filed a joint stipulation of dismissal with prejudice on that date.” (page 16)

  • Luis Lomeli v. Jackson Hewitt Inc., et al.

    settled

    Brought by a third party · filed 2017-04-17 · United States District Court for the Central District of California · 17-cv-02899

    “… (Case No.17-cv-02899; United States District Court for the Central District of California)”Page 15 of the 2023 FDD, Item 3

    Outcome: “the parties entered into a settlement agreement and general release under which we and TSA agreed to pay plaintiff $100,000”

  • State of New Jersey ex rel. Gulsen Kama v. Jackson Hewitt and David Prokupek

    settled

    Government or regulatory action · filed 2016-04-21 · Superior Court of New Jersey - Law Division - Hudson County · HUD-L-1637-16

    “State of New Jersey ex rel. Gulsen Kama v. Jackson Hewitt and David Prokupek”Page 15 of the 2023 FDD, Item 3

    Outcome: “the parties entered in a settlement agreement under which we and Prokupek agreed to pay the plaintiff $400,000 and the parties exchanged mutual releases.”

Status not stated in the filing (7)

  • Jackson Hewitt Inc. v Bonnie Hyde and Bonnie & Associates, Inc.

    Brought by the franchisor · filed 2023-03-10 · Superior Court of New Jersey · HUD-L-000876-23

    “Jackson Hewitt Inc. v Bonnie Hyde and Bonnie & Associates, Inc.”Page 14 of the 2023 FDD, Item 3

  • Jackson Hewitt Inc. v Lillian A. Bell

    Brought by the franchisor · filed 2023-03-10 · Superior Court of New Jersey · HUD-L-000877-23

    “… (Case No. HUD-L-000877-23; Superior Court of New Jersey)”Page 14 of the 2023 FDD, Item 3

  • Jackson Hewitt Inc. v Susan B. Scott and Leslie N. Scott

    Brought by the franchisor · filed 2023-03-10 · Superior Court of New Jersey · HUD-L-000878-23

    “Jackson Hewitt Inc. v Susan B. Scott and Leslie N. Scott”Page 14 of the 2023 FDD, Item 3

  • Jackson Hewitt Inc. v. ATR Group, LLC; Mohamed Diakite; and Mariama Diallo

    Brought by the franchisor · filed 2023-02-28 · American Arbitration Association · 01-23-0000-8375

    “Jackson Hewitt Inc. v. ATR Group, LLC; Mohamed Diakite; and Mariama Diallo”Page 14 of the 2023 FDD, Item 3

  • Jackson Hewitt Inc. v Kanwaldev Sra and Tax Affair, Inc.

    Brought by the franchisor · filed 2022-06-30 · United States District Court for the District of New Jersey · 2:22-cv-04346-JMV-ESK

    “Jackson Hewitt Inc. v Kanwaldev Sra and Tax Affair, Inc.”Page 14 of the 2023 FDD, Item 3

  • Jackson Hewitt Inc. v TME Enterprises II LLC; Todd Elliott; and Mary Elliott

    Brought by the franchisor · filed 2022-08-22 · Superior Court of New Jersey · HUD-L-002780-22

    “Jackson Hewitt Inc. v TME Enterprises II LLC; Todd Elliott; and Mary Elliott”Page 14 of the 2023 FDD, Item 3

  • Jackson Hewitt Inc. v. TME Enterprises LLC and Todd Martin Elliott

    Brought by the franchisor · filed 2022-08-29 · American Arbitration Association · 01-22-0003-6700

    “Jackson Hewitt Inc. v. TME Enterprises LLC and Todd Martin Elliott”Page 14 of the 2023 FDD, Item 3

Officers and directors (individuals, not the company)

Pending (1)

  • Robert Lematta, individually and on behalf of all others similarly situated, v. Casper Sleep Inc., Philip Krim, Gregory Macfarlane, et al. (the Federal Action) and In re Casper Sleep Inc. Securities Litigation (the State Action)

    pending

    Brought by a third party · Gregory Macfarlane, President and Chief Executive Officer (sued over his prior role as Casper Sleep Inc.'s CFO and COO) · filed 2020 · United States District Court for the Eastern District of New York (Federal Action) and Supreme Court of the State of New York, County of New York: Commercial Division (State Action) · 1:20-cv-02744-MKB-RML (Federal Action); Index No. 652284/2020 (State Action)

    “Robert Lematta, individually and on behalf of all others similarly situated, v. Casper Sleep Inc., Philip Krim, Gregory Macfarlane, Neil Parikh, Diane Irvine, Anthony Florence, Jack Lazar, Benjamin Lerer, Karen Katz, Dani Reiss, Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, Jefferies LLC, BofA Securities, Inc., UBS Securities LLC, Citigroup Global Markets Inc., Piper Sandler & Co. and Guggenheim Securities, LLC”Page 12 of the 2023 FDD, Item 3

    Outcome: “On September 30, 2022, the court in the Federal Action granted in part and denied in part the motion to dismiss.” (page 13)

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

  • 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?
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