FDD Items 3 & 4 · 2026 filing
Mr. Appliance litigation history
What Mr. Appliance 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
- 3
- Item 3, as counted in the filing
- Largest disclosed settlement
- $100K
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2026
- Disclosures cover the prior ten years
Extracted from the 2026 Franchise Disclosure Document
Item 3: litigation
2 prior actions (one franchisor as plaintiff for breach/non-compete settled $100K, one predecessor as defendant by former franchisees settled with no payment); 1 affiliate administrative order (Window Genie/CA, $5,000 penalty); 1 fiscal 2025 suit against franchisee for monies and non-compete.
Disclosed in the 2026 Franchise Disclosure Document
Item 4: bankruptcy
No bankruptcy involving the franchisor itself. Several KKR-affiliated portfolio companies disclosed: Marelli Holdings (June 2025 Ch.11), The Collected Group (April 2021, emerged May 2021), Envision Healthcare (May 2023, emerged Nov 2023), Genesis Care (June 2023, emerged Feb 2024), IPI Legacy Liquidation (Dec 2023, emerged Apr 2024), Cafe Coffee Day (insolvency 2024, resolved 2025).
Disclosure signals that moved the score
How this shows up in the verdict
- Going concern status is FALSE, indicating potential financial instability at franchisor level
- Multiple litigation cases including fraud allegations (KB Industries et al.) and breach of contract disputes signal operational/support conflicts
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?