FDD Items 3 & 4 · 2025 filing
Palm Beach Beauty & Tan litigation history
What Palm Beach Beauty & Tan 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 & 4 at a glance
What the filing discloses
- Cases disclosed
- 1
- Item 3, as counted in the filing
- Largest disclosed settlement
- $36K
- As stated in Item 3
- 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
Sunless, Inc. v. Palm Beach Tan, Inc. and Palm Beach Tan Franchising, Inc. (N.D. Ohio, Case No. 1:22-cv-0090) - trademark/false advertising claims regarding Mystic Tan Kyss booths rebranded as Sunscape; settled confidentially in September 2024 with all claims dropped.
Disclosure signals that moved the score
How this shows up in the verdict
- 2.5-year litigation with competitor (2022-2024) over IP/rebranding creates brand uncertainty and suggests operational/marketing vulnerabilities
- Confidential settlement terms unknown — potential undisclosed operational or rebranding requirements could impact franchisee costs/liability
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?