FDD Items 3 & 4 · 2026 filing

Nutrishop litigation history

What Nutrishop 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: 5; 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: 2026; Disclosures cover the prior ten years

Extracted from the 2026 Franchise Disclosure Document

Item 3: litigation

Item 3 discloses 5 concluded matters: (1) SEC v. First Mortgage Corporation et al. (incl. director Clement Ziroli, Jr.) - securities fraud, Final Judgment July 2016, disgorgement/penalty totaling $638,625.90 against Ziroli Jr.; (2) Arizona Dept. of Financial Institutions cease-and-desist order against FMC and Ziroli Jr. (mortgage license violations), Consent Order Dec 2010, $39,582.50; (3) Minnesota Dept. of Commerce consent order against Nutrishop (sold 2 unregistered franchises), Aug 2019, $1,300; (4) Washington Securities Division consent order (registration/disclosure violations), Sept 2019, $1,000; (5) California DFPI v. Nutrishop (offered/sold ~58 franchises before registration), Consent Order Sept 2021, $95,000 administrative penalty.

Item 3 (litigation) · 5 matters disclosed

Litigation cases

The franchisor

Concluded (3)

In the Matter of The Commissioner of Financial Protection and Innovation v. Nutrishop, Inc.
concluded
Government or regulatory action · filed 2021-09-15 · California Department of Financial Protection and Innovation
“… We filed a renewal franchise registration application with the Department of Financial Protection and Innovation of the State of California (“California Department”)”Page 12 of the 2026 FDD, Item 3
In the Matter of Nutrishop, Inc.
concluded
Government or regulatory action · filed 2019-09-25 · Washington Department of Financial Institutions, Securities Division · S-19-2724-19-CO01
“… (Order No. S-19-2724-19-CO01). We filed an initial franchise registration application with the Securities Division of the Department of Financial Institutions of Washington (“Washington Securities Division”), at which time”Page 12 of the 2026 FDD, Item 3
In the Matter of Registration of NutriShop, Inc.
concluded
Government or regulatory action · filed 2019-08-08 · Minnesota Department of Commerce · 55178/BD
“Concluded matters involving us: In the Matter of Registration of NutriShop, Inc., (Order No. 55178/BD). We filed an initial franchise registration application with the State of Minnesota Department of Commerce (“Minnesota Department of Commerce”), at which”Page 11 of the 2026 FDD, Item 3

Officers and directors (individuals, not the company)

Concluded (2)

Securities and Exchange Commission v. First Mortgage Corporation, Inc., Clement Ziroli, Sr., Clement Ziroli, Jr., Pac W. Dong, Ronald T. Vargus, Scott Lehrer, and Edward Joseph Sanders
judgment
Government or regulatory action · Clement Ziroli, Jr. (one of our directors) · filed 2016-05-31 · U.S. District Court, Central District of California · 2:16- cv-03772-BRO-E
“… 2:16- cv-03772-BRO-E, United States District Court, Central District of California.”Page 10 of the 2026 FDD, Item 3
In the Matter of the Mortgage Banker License of First Mortgage Corporation and Clement Ziroli, Jr., President
concluded
Government or regulatory action · Clement Ziroli, Jr. (one of our directors) · filed 2010-10-13 · Arizona Department of Financial Institutions · 11F-BD071-SBD
“… No. 11F-BD071-SBD, Arizona Department of Financial Institutions.”Page 11 of the 2026 FDD, Item 3

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

Director litigation involving mortgage securities and banking licenses raises governance and integrity concerns

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?

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