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 & 4 at a glance
What the filing discloses
- Cases disclosed
- 5
- Item 3, as counted in the filing
- Largest disclosed settlement
- $95K
- 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
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.
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
- No 'Going Concern' disclosure is absent/false, but combined with declining units signals potential financial instability
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?