FDD Items 3 & 4 · 2026 filing
Mac Tools litigation history
What Mac Tools 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
- 11
- Item 3, as counted in the filing
- Largest disclosed settlement
- $1.5M
- 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
11 cases disclosed: 5 pending (Rubalcaba PAGA, Rammohan securities class action, Callahan derivative, Applebaum derivative, Vladimir Gusinsky derivative); 6 concluded (Murrieta PAGA settlement $1.5M, Streedharan/Madriz settled, Starke MD consumer protection settled $1.08M, Iron Horse replevin settled, Dawley arbitration settled $25k, Nigel Clarke arbitration settled debt forgiveness). Also FTC/state consent decrees re Made-in-USA labeling (1999).
Disclosure signals that moved the score
How this shows up in the verdict
- Active litigation involving misclassification claims and securities violations suggests systemic franchisor practices may expose franchisees to legal liability
- Going concern status is FALSE, signaling the franchisor may lack financial stability or operational viability
- History of labor code violations and breach of warranty settlements indicates recurring compliance and performance gaps
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?