FDD Items 3 & 4 · 2025 filing

OsteoStrong litigation history

What OsteoStrong disclosed about lawsuits, arbitrations and bankruptcy in the 2025 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: 6; 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: 2025; Disclosures cover the prior ten years

Extracted from the 2025 Franchise Disclosure Document

Item 3: litigation

One pending consolidated federal action in S.D. Tex. with former franchisees/regional developers (Simpson parties) alleging FDD misrepresentation/omission and breach of regional development agreements, with franchisor counterclaims for defamation/conspiracy (in discovery). Five past actions: a 2025 California DFPI consent order (franchisor paid $10,500 in penalties and agreed to refund affected investors over unregistered franchise broker agreements); Albrecht/JDG-OS (settled, $67,500 paid by insurer); Rhodes/OsteoFit international trademark/development disputes (settled, $125,000 paid by insurer); Partlow/Bio Strength (settled, $150,000 paid by insurer); and Baird/K&L Wellness (transferred and consolidated into the Simpson case).

Item 3 (litigation) · 6 matters disclosed · 1 pending listed

Litigation cases

The franchisor

Pending (1)

Sean Simpson, Charla Simpson, OS New Mexico, LLC, and OS Regional Developers Colorado a/k/a OS Regional Developers Colorado, LLC v. OsteoStrong Franchising, LLC v. OsteoStrong Franchising, Inc. v. Rachelle Worral, Derek Albrecht, James Hellerman, Gale Jungemann-Schulz, John Baird, Linda Burbank & Ke
pending
Brought by a franchisee · filed 2019-06-28 · United States District Court for the Southern District of Texas, Houston Division · 4:19-cv-02334 (consolidated with 4:21-cv-03330)
“… n Burbank, K&L Wellness, LLC, Mary Jo McHenry, Bret Kurihara, Roy Kevin Gutierrez, Coleman Travelstead, Brookes McIntyre, BNS RD, LLC, BioStrength 1, Mark Partlow, Karen Partlow, and John Does 1-10 ;Case No. 4:19-cv-02334 filed in the United States District Court for the Southern District of Texas H”Page 10 of the 2025 FDD, Item 3
Outcome: “On December 21, 2021, this case was consolidated under the above case title and is currently in the discovery phase of litigation.” (page 11)

Concluded (4)

Derek Albrecht and JDG-OS Enterprises, LLC v. OsteoStrong Franchising, LLC, et al
concluded
Brought by a franchisee · filed 2020-01-23 · Superior Court of Riverside County, California; United States District Court for the Central District of California, Eastern Division · 5:20-cv-00826
“… Case No. 5:20-cv- 00826, originally filed by Plaintiffs in the Superior Court of Riverside County, California on January 23, 2020, and removed by Franchisor to the United States District Court for the Central District of California Eastern Division on April 17, 2020.”Page 11 of the 2025 FDD, Item 3
Outcome: “On April 11, 2022 the parties settled this case in exchange for mutual releases and a payment of $67,500 by the insurance carrier to plaintiffs. On May 4, 2022 the case was dismissed with prejudice.”
Mark and Karen Partlow and Bio Strength 1 v. OsteoStrong Franchising, LLC, Many Butera, and Kyle Zagrodzky
concluded
Brought by a franchisee · filed 2020-09-25 · District Court of Harris County, Texas · 2020-60541
“… Case No. 2020-60541 filed in the District Court of Harris County, Texas on September 25, 2020.”Page 12 of the 2025 FDD, Item 3
Outcome: “The parties have settled this dispute in exchange for mutual releases, and a payment of $150,000 by Franchisor’s insurance carrier. The case was dismissed with prejudice on May 27, 2022.”
OsteoStrong Franchising, LLC, OsteoStrong International, Inc., Kyle Zagrodzky, and James Youngblood v. Gary Andrew Rhodes, Nichola Taylor, OsteoFit AG, Ronald Berger, and Charles Berger
concluded
Brought by the franchisor · filed 2020-02-11 · United States District Court for the Southern District of Texas, Houston Division; Fifth Circuit Court of Appeals · 4:20-cv-00465; No. 22-20069 (5th Cir.)
“OsteoStrong Franchising, LLC, OsteoStrong International, Inc., Kyle Zagrodzky, and James Youngblood v. Gary Andrew Rhodes, Nichola Taylor, OsteoFit AG, Ronald Berger, and Charles Berger”Page 11 of the 2025 FDD, Item 3
Outcome: “The parties subsequently resolved the dispute with OSI buying back the Master license.” (page 12)
The Commissioner of Financial Protection and Innovation v. OsteoStrong Franchising, Inc. aka OsteoStrong Franchising, LLC
concluded
Government or regulatory action · California Department of Financial Protection and Innovation
“… (Consent Order entered into with California’s Commissioner of Financial Protection and Innovation (“Commissioner”) on July 11, 2025).”Page 11 of the 2025 FDD, Item 3
Outcome: “OsteoStrong agreed to an injunction barring it from breaching any provision of the CFIL in the future, to pay $10,500 in administrative penalties, and agreed to refund any funds received from the affected investors.”

Status not stated in the filing (1)

John Baird, K&L Wellness, LLC, Bret Kurihara, OS New Mexico, LLC, BNS RD, LLC, Sean Simpson, Charla Simpson, and Mary Jo Mchenry v. OsteoStrong Franchising, LLC, Kyle Zagrodzky, and John Jaquish
Government or regulatory action · filed 2020-10-07 · United States District Court for the Eastern District of California; United States District Court for the Southern District of Texas · 2:20-at-00986; transferred as 4-22-CV-0843
“… Case No. 2:20-at-00986 filed in the United States District Court for the Eastern District of California on October 7, 2020.”Page 12 of the 2025 FDD, Item 3
Outcome: “On March 8, 2022, the Court granted Franchisor’s motion to transfer this case to Houston, cause no. 4-22-CV-0843 in the Southern District of Texas. A motion to consolidate this case with the Sean Simpson case above has been granted.” (page 13)

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 active litigation cases involving misrepresentation and breach of contract allegations from former franchisees and regional developers

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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