FDD Items 3 & 4 · 2025 filing

Massage Envy litigation history

What Massage Envy 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 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 16; 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: 2025; Disclosures cover the prior ten years

Extracted from the 2025 Franchise Disclosure Document

Item 3: litigation

Active: Grosso consumer class action re membership fees after closure; numerous sexual misconduct lawsuits. Concluded: Hahn, Robinson, Zizian consumer class actions (membership cancellation); NHMME franchisee arbitration (fraud/misrepresentation); Pirozzi class action (50-min massage); Franchisee Arbitrations (105 arbitrations settled $3.95M); Long Beach franchisee (territory/fraud, $700K); Monterey DA (unfair competition). Franchisor filed wrongful abandonment and technology compliance arbitrations against franchisees.

Item 3 (litigation) · 16 matters disclosed · 3 pending listed

Litigation cases

The franchisor and its predecessor

Pending (3)

Grosso v. Massage Envy Franchising, LLC
pending
Brought by a third party · filed 2024-08-21 · United States District Court for the Northern District of California · 4:24-cv-05585-JST
“… Case No. 4:24-cv-05585-JST, United States District Court for the Northern District of California”Page 20 of the 2025 FDD, Item 3
Outcome: “Defendants’ motion to compel arbitration of plaintiffs’ claims on an individual basis is pending.”
Baerbel McKinney-Drobnis, Joseph B. Piccola, and Camille Berlese v. Massage Envy Franchising, LLC
pending
Brought by a third party · Massage Envy Franchising, LLC · filed 2016-11-04 · United States District Court for the Northern District of California (fee appeal pending in the Ninth Circuit) · 3:16-cv-06450
“… United States District Court for the Northern District of California, Case No.”Page 20 of the 2025 FDD, Item 3
Outcome: “which the plaintiffs appealed and is now pending with the United States Court of Appeals for the Ninth” (page 21)
In the Matter of Massage Envy Franchising, LLC et. al. in various states and counties
pending
Brought by a third party · various state courts and counties
“… In addition to naming the specific franchisees as defendants, MEF and/or ME SPE Franchising have been”Page 21 of the 2025 FDD, Item 3
Outcome: “We have reached settlements in certain of the lawsuits. Depending on the circumstances, MEF and/or ME SPE Franchising have brought, and may bring in the future, crossclaims against the”

Concluded (10)

Failure to Comply with Mandatory Technology Update Arbitrations
concluded
Brought by the franchisor · filed 2024-07-10 · arbitration (two separate demands)
“On July 10, 2024, we filed two separate demands for arbitration against two franchisees and the owners of each franchise entity, alleging that they breached their franchise agreement and”Page 24 of the 2025 FDD, Item 3
Outcome: “One of the two arbitrations was dismissed following the franchisee’s compliance. The other arbitration was dismissed following the franchisee’s closure of the”
Wrongful Abandonment Arbitrations
concluded
Brought by the franchisor · filed 2024-08-19 · arbitration (six separate demands)
“On August 19, 2024, we filed six separate demands for arbitration against six franchisees and the owners of each franchise entity, alleging that they breached their franchise agreement and”Page 24 of the 2025 FDD, Item 3
Outcome: “These matters have been resolved in our”
Phoenix Wellness Avondale, Inc. v. Massage Envy Franchising, LLC (“MEF”) and ME SPE Franchising, LLC (“ME SPE”)
concluded
Brought by a franchisee · filed 2021-01-20 · American Arbitration Association · 01-21-0000-2594
“… American Arbitration Association, Case. No.”Page 23 of the 2025 FDD, Item 3
Outcome: “All of the Franchisee Arbitrations have been dismissed with prejudice as contemplated by the” (page 24)
Long Beach Envy, Inc., Tania Davies and Andrew Davies v. Massage Envy Limited, LLC, Massage Envy Franchising, LLC and ME SPE Franchising, LLC
concluded
Brought by a franchisee · filed 2020-05-20 · American Arbitration Association · 01-20-0005-3414
“… American Arbitration Association, Case No.”Page 24 of the 2025 FDD, Item 3
Outcome: “The parties reached a settlement on August 11, 2022, in which MEF and other releasees obtained a general release from Claimants including all claims asserted in the arbitration or that”
Mark Pirozzi v. Massage Envy Franchising, LLC
concluded
Brought by a third party · Massage Envy Franchising, LLC · filed 2017-01-31 · Circuit Court of the County of St. Louis, Missouri; removed to the Federal Court for the Eastern District of Missouri · 17SL-CC00401
“… State of Missouri, Circuit Court of the County of St. Louis, Case No. 17SL-CC00401 (filed January 31, 2017); removed to the Federal Court for”Page 23 of the 2025 FDD, Item 3
Outcome: “Final approval of the parties’ settlement was granted by the court on November 13, 2020.”
NHMME, LLC, John Vatistas and Tasha Vatistas v. Massage Envy Franchising, LLC, David Crisalli, Joel Luongo, Lori Merrall, April Kern, Jerome Kern, et al.
concluded
Brought by a franchisee · Massage Envy Franchising, LLC and current and former officers · filed 2016-03-11 · American Arbitration Association (Demand for Arbitration) · 01-16-0000-8441
“NHMME, LLC, John Vatistas and Tasha Vatistas v. Massage Envy Franchising, LLC, David Crisalli, Joel Luongo, Lori Merrall, April Kern, Jerome Kern, et al., Case No.”Page 22 of the 2025 FDD, Item 3
Outcome: “On June 20, 2017, the parties finalized a confidential settlement of Claimants’ claims.” (page 23)
Zizian v. Massage Envy Franchising, LLC
concluded
Brought by a third party · Massage Envy Franchising, LLC · filed 2016-04-01 · United States District Court, Southern District of California · 3:16-cv-00783-DMS
“… United States District Court, Southern District of California, Case No.”Page 22 of the 2025 FDD, Item 3
Outcome: “On January 13, 2017, the Court approved a nationwide class action settlement in which MEF admitted no liability and entered a final judgment.”
Robinson v. Massage Envy Franchising, LLC
concluded
Brought by a third party · Massage Envy Franchising, LLC · filed 2014-11-26 · United States District Court, Southern District of Florida (removed from the Circuit Court of Florida, Broward County) · 0:15-cv-60017-PAS; CACE14022736
“… United States District Court, Southern District of Florida, Case No. 0:15-cv-60017-PAS, removed January 2, 2015, from the Circuit Court of”Page 22 of the 2025 FDD, Item 3
Outcome: “On August 31, 2016, the Court entered an order of final dismissal as Plaintiff’s claims were released as part of the Zizian”
Hahn v. Massage Envy Franchising, LLC and Massage Envy, LLC
concluded
Brought by a third party · Massage Envy Franchising, LLC · filed 2011-12-07 · United States District Court, Southern District of California (removed from Superior Court of California, County of San Diego) · 12cv153-DMS (BGS); 37-2011-00102080-CU-BT-CTL
“… United States District Court, Southern District of California, Case No. 12cv153-DMS (BGS), removed January 18, 2012, from”Page 21 of the 2025 FDD, Item 3
Outcome: “On July 5, 2016, the Court entered an order granting final approval of the parties’ amended settlement agreement and entered a final”
Investigation of Monterey County, California District Attorney
concluded
Massage Envy Franchising, LLC and Massage Envy FLW, LLC · Monterey County, California District Attorney (stipulated entry of final judgment)
“… The District Attorney alleged that MEF was liable for various acts and practices under California’s Unfair Competition Law”Page 23 of the 2025 FDD, Item 3
Outcome: “Pursuant to a settlement agreement, MEF, Massage Envy FLW, LLC, and the district attorney stipulated to the entry of final”

Parent, affiliates, master franchisor and subfranchisor

Concluded (2)

The People of the State of California v. Arby’s Restaurant Group, Inc.
concluded
Government or regulatory action · Arby’s Restaurant Group, Inc. · filed 2019-03-19 · California Superior Court, Los Angeles County · 19STCV09397
“… (California Superior Court, Los Angeles County, Case No. 19STCV09397, filed March 19, 2019).”Page 25 of the 2025 FDD, Item 3
Outcome: “Under the settlement agreement, ARG paid no money but agreed (a) to remove the disputed provision from its franchise agreements”
The People of the State of California v. Dunkin’ Brands, Inc.
concluded
Government or regulatory action · Dunkin Brands, Inc. · filed 2019-03-19 · California Superior Court, Los Angeles County · E25636618
“… (California Superior Court, Los Angeles County, Case No.”Page 25 of the 2025 FDD, Item 3
Outcome: “the action was closed after the court approved the parties’ stipulation of”

This list shows 15 of the 16 matters Item 3 discloses; the rest are in the filing.

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

Extensive litigation involving membership billing practices, territorial disputes, and alleged misconduct by service providers creates legal and reputational risk
Numerous customer lawsuits alleging provider misconduct indicate potential compliance and liability exposure for franchisees

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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