FDD Items 3 & 4 · 2024 filing
Massage Heights litigation history
What Massage Heights disclosed about lawsuits, arbitrations and bankruptcy in the 2024 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
- 4
- 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
- 2024
- Disclosures cover the prior ten years
Extracted from the 2024 Franchise Disclosure Document
Item 3: litigation
1 pending suit by franchisor against a defaulting former franchisee/guarantor for breach and abandonment (seeking >$1,000,000); 3 prior actions: a franchisee arbitration alleging disability-accommodation-related fraud (franchisee awarded $344,933.15), an area representative's breach-of-contract suit settled via royalty reduction, and a regional developer arbitration over renewal rights (developer awarded $88,137.50 net).
Item 3 (litigation) · 4 matters disclosed · 1 pending listed
Litigation cases
The franchisor
Pending (1)
Massage Heights Franchising, LLC f/k/a Massage Heights Corporate, LLC v. v. Eric Oliver, OMG MH Holdings, LLC, and MH Alden Bridge, LLC
pendingBrought against a franchisee · filed 2022-11-21 · District Court of Bexar County, Texas, 45th Judicial District Court · 2022CI22792
“… (No. 2022CI22792) (District Court of Bexar County, Texas, 45th Judicial District Court).”Page 13 of the 2024 FDD, Item 3
Concluded (3)
Busch Management Group, LLC v. Massage Heights Franchising, LLC
settledfiled 2020-04-15 · District Court of Harris County, Texas, 157th Judicial District · 2020-23498
“… (No. 2020-23498) (District Court of Harris County, Texas, 157th Judicial District).”Page 14 of the 2024 FDD, Item 3
Outcome: “The parties reached a settlement agreement whereby the parties agreed to terminate the Area Representative Agreement and to reduce MH Franchising’s royalty payments to the area developer to 25% for a period of 36 consecutive months commencing on April 20, 2020.”
Hayes v. Massage Heights Corporate, LLC
judgmentBrought by a franchisee · filed 2019-12-02 · Demand for Arbitration · 01-19-0004-2416
“… (01-19-0004-2416), Demand for Arbitration (filed Dec. 2, 2019). A Florida franchisee filed an arbitration demand against MH Franchising, alleging breach of contract, fraud in the inducement, fraud, fraudulent concealment, and misrepresentation relating to the accommodation of the franchisee’s hearing disability.”Page 13 of the 2024 FDD, Item 3
Outcome: “The arbitrator issued an award on November 23, 2020, finding that both the franchisor”
Massage Heights Franchising, LLC v. Relax Investments, LLC, Steven McFadden, and Trisha McFadden
judgmentBrought by the franchisor · filed 2018-07-19 · Demand for Arbitration (San Antonio, Texas) · 1-18-0002-7596
“… (1-18-0002-7596), Demand for Arbitration (filed July 19, 2018).”Page 14 of the 2024 FDD, Item 3
Outcome: “On August 21, 2019, the arbitrator found the Area Development Agreement was subject to renewal and awarded Respondent attorneys’ fees, expenses, and other relief, offset by the renewal fee owed to us for a total damage award of $88,137.50.”
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.
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?