FDD Items 3 & 4 · 2026 filing
Mr. Rooter litigation history
What Mr. Rooter 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 (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
- $125K
- 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
Predecessor was sued for trademark misuse/non-compete violation (settled, franchisee paid $400,000) and for trademark dilution by a third party (settled for $125,000 paid by predecessor); franchisor initiated one FY2025 suit to collect monies owed from a terminated franchisee.
Item 3 (litigation) · 4 matters disclosed
Litigation cases
The franchisor and its predecessor
Concluded (2)
Mr. Rooter LLC vs. MTCH Service Experts Corp and Michael Douglas Horn
settledBrought against a franchisee · Mr. Rooter LLC (Predecessor) · filed 2019-02-07 · U.S. District Court, Western District of Texas, Waco Division · 6:19-CV-42
“… (Cause No. 6:19- CV-42 in the United States District Court Western District of Texas Waco Division).”Page 24 of the 2026 FDD, Item 3
Outcome: “The matter was resolved via a settlement agreement entered into by the parties on November 1, 2019. Pursuant to the settlement agreement: Defendants agreed to pay to Plaintiff $400,000;”
Beacon Plumbing & Mechanical, Inc. vs. Sposari Inc. dba Mr. Rooter Plumbing Services, Mr. Rooter LLC, The Dwyer Group, Inc., The Dwyer Group LLC, and John Does 1-100
settledBrought by the franchisor · Mr. Rooter LLC (Predecessor) · filed 2015-10-09 · U.S. District Court, Western District of Washington at Seattle · 2:15-CV-01613
“… (Case No. 2:15-CV- 01613 in the U.S.D.C., W.D., Washington at Seattle).”Page 24 of the 2026 FDD, Item 3
Outcome: “The parties settled this matter on March 22, 2017 with Predecessor paying Plaintiff $125,000 and delivering a notice to Predecessor’s franchisees and marketing employees that they should never use the phrase “BEACON PLUMBING” in any advertisement that could be reasonably construed to suggest that”
Status not stated in the filing (1)
Mr. Rooter SPV LLC v. Water 2 Watts, LLC, William John Tower, and Erin Michael Tower
Brought against a franchisee · filed 2025-04-21 · 414th Judicial District Court, McLennan County, Texas · 2025-1060-5
“… Case No. 2025-1060-5, filed on April 21, 2025, in the 414th Judicial District Court, McLennan County, Texas.”Page 25 of the 2026 FDD, Item 3
Parent, affiliates, master franchisor and subfranchisor
Concluded (1)
The Commissioner of Business Oversight of the State of California v. For Franchising LLC d/b/a Window Genie and Richard Nonelle
concludedGovernment or regulatory action · FOR Franchising LLC (a predecessor to our affiliate Window Genie) · filed 2017-11-14 · California Department of Business Oversight
“The Commissioner of Business Oversight of the State of California v. For Franchising LLC d/b/a Window Genie and Richard Nonelle.”Page 25 of the 2026 FDD, Item 3
Outcome: “FOR would pay an administrative penalty in the total amount of $5,000 (which amount FOR paid) and (c) within 90 days of the date of the Consent Order, Mr. Nonelle and all persons employed by FOR who assist in preparing franchise registrations or who assist in franchise selling would attend remedial education of eight hours of franchise law training courses per person (which requirement has been completed).”
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.
Disclosed in the 2026 Franchise Disclosure Document
Item 4: bankruptcy
Disclosed bankruptcies involve KKR-portfolio companies unrelated to the Franchisor (Marelli Holdings, The Collected Group, Envision Healthcare, Genesis Care, IPI Legacy Liquidation, Café Coffee Day) - none involve Mr. Rooter SPV LLC, its officers, or predecessor.
Disclosure signals that moved the score
How this shows up in the verdict
- Two trademark/IP litigation cases settled in recent history indicate brand protection vulnerabilities and competitive pressure
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?