FDD Items 3 & 4 · 2025 filing
Magnolia Soap and Bath Co. litigation history
What Magnolia Soap and Bath Co. 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
- 2
- Item 3, as counted in the filing
- Largest disclosed settlement
- $50K
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
Case 1: Buff City Soap LLC et al. v. Magen Bynum et al. (Civil Action No. 3:20cv55-NBB-RP) - competitor filed IP/trade secret complaint; settled July 2022 for $50,000 with no liability admitted. Case 2: Array of Soap, LLC v. Magnolia Soap and Bath Co. and Emily Burriss (Civil Action No. 2:25-cv-00339) - former franchisee alleging Ohio Business Opportunity Plan Act violation, fraud, breach of contract, unjust enrichment; pending.
Disclosure signals that moved the score
How this shows up in the verdict
- Going Concern status is False — indicates potential financial instability or accounting issues at franchisor level
- Pending litigation from former franchisee alleging fraud and violations of Ohio Business Opportunity Plan Act creates legal/regulatory exposure
- Prior IP infringement lawsuit settled for $50,000 (2022) suggests product/branding vulnerability in competitive soap market
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?