FDD Items 3 & 4 · 2025 filing
Johnny Rockets litigation history
What Johnny Rockets 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
- 8
- Item 3, as counted in the filing
- Largest disclosed settlement
- $3.0M
- 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
8 cases disclosed: 1 pending class action (Kates v. FAT Brands 2024); 7 concluded including Matthews/Chipman securities class action (settled $3M), two Virginia state regulatory actions against Fatburger, Shahi v. FBNA (dismissed 2021), P&K v. Buffalo's (dismissed 2019), Rojany/Alden consolidated (settled $50K), Vignola (settled $75K)
Disclosed in the 2025 Franchise Disclosure Document
Item 4: bankruptcy
FAT Brands, Inc. (parent) and subsidiary entities including Johnny Rockets Licensing, LLC filed voluntary Chapter 11 petitions on January 25, 2026 in U.S. Bankruptcy Court for the Southern District of Texas (Case No. 26-90126 ARP) to restructure corporate debt
Disclosure signals that moved the score
How this shows up in the verdict
- Multiple active litigation matters including putative investor class action against parent company FAT Brands raises governance and transparency concerns
- Going concern notation indicates FAT Brands has substantial doubt about continuity, signaling financial distress at corporate level
- Securities litigation history and franchise registration disputes in Virginia suggest regulatory compliance and disclosure problems
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?