FDD Items 3 & 4 · 2026 filing
NHance litigation history
What NHance 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
- 3
- Item 3, as counted in the filing
- Largest settlement, franchisor's own cases
- $78K
- 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 prior actions: (1) NHance v. Amore Contract Services – breach of contract for unpaid royalties, awarded $193,672.71 (May 2025); (2) Torok v. NHance – franchisee claims of misrepresentation, settled April 2019 with $78,000 payment to franchisee; (3) NHance v. Finishline Cabinets – trade secrets/unfair competition, settled July 2024 for $2,000 payment to NHance.
Item 3 (litigation) · 3 matters disclosed
Litigation cases
The franchisor
Concluded (3)
NHance, Inc. v. Amore Contract Services, Inc. dba N-Hance of South Nassau and James Berardi
judgmentBrought against a franchisee · filed 2025-01-03 · American Arbitration Association · 01-25-0000-0221
“… American Arbitration Association No. 01-25-0000-0221.”Page 15 of the 2026 FDD, Item 3
NHance, Inc. and Chem-Dry, Inc. v. Finishline Cabinets, LLC, Hubsuite Marketing Agency, LLC, David Murphy, and Dan Kenning.
settledBrought by the franchisor · filed 2023-06-20 · U.S. District Court, S.D. Mississippi, Northern Division · 3:23-cv-395-KHJ-MTP
“NHance, Inc. and Chem-Dry, Inc. v. Finishline Cabinets, LLC, Hubsuite Marketing Agency, LLC, David Murphy, and Dan Kenning.”Page 15 of the 2026 FDD, Item 3
Outcome: “A settlement was reached in July 2024, whereby the Defendants agreed to cease the infringing activity and pay Nhance the sum of $2,000.”
Scott Torok v Nhance, Inc.
concludedBrought by a franchisee · filed 2017-10-20 · American Arbitration Association, Nashville, Tennessee · 01-17-0006-3692
“… On October 20, 2017, NHI franchisee Scott Torok filed a demand with the American Arbitration Association, Case No. 01-17-0006-3692, in Nashville, Tennessee.”Page 15 of the 2026 FDD, Item 3
Outcome: “On April 1, 2019 the parties agreed to mutually terminate the franchise agreements and NHI agreed to repurchase certain major equipment, marketing materials and telephone numbers, and released certain installment obligations resulting in a cash payment to the franchisee of $78,000, plus the exchange of mutual releases.”
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
- Multiple litigations: Three separate legal actions (unpaid royalties, misrepresentation claims, IP violations) suggest compliance issues, franchisor-franchisee friction, and possible quality control gaps
- Litigation pattern: Mix of franchisor enforcement (Amore, Finishline) and franchisee complaints (Torok misrepresentation) suggests systemic relationship issues
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?