FDD Items 3 & 4 · 2026 filing
McDonald’s litigation history
What McDonald’s 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
- 20
- Item 3, as counted in the filing
- Largest disclosed settlement
- $19.0M
- 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
3 pending federal putative class actions (breach of franchise agreement/CUTPA, E. coli/Quarter Pounder product liability class action, McRib deceptive marketing class action) plus numerous ongoing joint-employer labor/employment suits; 17 concluded matters since 2007 including franchisee discrimination/termination settlements (up to $33.5M), a 2023 SEC administrative settlement re: Easterbrook severance disclosures (no penalty), PFAS packaging settlement, and various consumer class action settlements ($2,500 to $15.6M range plus a $19M supplier-related settlement in May 2025).
Disclosure signals that moved the score
How this shows up in the verdict
- Significant litigation exposure: Multiple class actions (consumer fraud, joint employer, discrimination, trademark) suggest systemic operational and legal risks that could impact franchise model
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?