FDD Items 3 & 4 · 2025 filing

Patrice & Associates litigation history

What Patrice & Associates 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: 4; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $125K; 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

Two concluded matters involving predecessor PAF: Fischer arbitration (franchisee awarded refund of franchise fees only); Harris/Hospitality Partners AAA arbitration settled for $69,000 refund. One pending civil complaint (Sweeney, CA Superior Court) alleging fraudulent inducement, negligent misrepresentation, and violation of California Franchise Investment Law; damages not less than $125,000; actively defended.

Item 3 (litigation) · 4 matters disclosed · 1 pending listed

Litigation cases

The franchisor and its predecessor

Pending (1)

Jason B. Sweeney v. Patrice & Associates, LLC; Jason Miller; James Hinchey; Sabrina Demetriades; and Does 1-50
pending
Brought by a franchisee · filed 2025-12-03 · Superior Court of the State of California, County of San Luis Obispo · 25CV0456
“… Case No. 25CV0456 (Superior Court of the State of California, County of San Luis Obispo, North County Division – Paso Robles Branch) On December 3,”Page 11 of the 2025 FDD, Item 3

Concluded (3)

Patrice & Associates Franchising, Inc. (now Patrice Franchising, LLC) v. McCoury Enterprises, Inc.
settled
Brought against a franchisee · Patrice & Associates Franchising, Inc. (PAF, our predecessor) · filed 2019-12-12 · American Arbitration Association · 01-19-0004-4829
“On December 12, 2019, our predecessor, PAF, filed for arbitration against McCoury Enterprises, Inc. (“McCoury”), an area representative, seeking a declaratory judgment stating that (a) McCoury breached the area representative agreement in several material”Page 11 of the 2025 FDD, Item 3
Outcome: “PAF agreed to pay to McCoury an amount of $125,000 and the parties mutually agreed to terminate the Area Representative Agreement and Franchise Agreement and exchanged mutual releases.”
Daniel Harris and Hospitality Partners, LLC v. Patrice and Associates Franchising, Inc., Patrice Rice and Brian Miller
settled
Brought by a franchisee · Patrice & Associates Franchising, Inc. (PAF, our predecessor) · filed 2018-01-03 · American Arbitration Association · 01-18-0000-0461
“… Case No. 01-18-0000-0461 (American Arbitration Association) Franchisee Daniel Harris and Hospitality Partners, LLC (“Claimant”) filed for”Page 11 of the 2025 FDD, Item 3
Outcome: “PAF and the Claimant entered into a confidential settlement agreement whereby PAF refunded the fees and training costs Claimant paid to PAF ($69,000) and the parties exchanged mutual releases without admitting wrongdoing.”
Mark Fischer v. Patrice & Associates Franchising, Inc. (now Patrice Franchising, LLC)
judgment
Brought by a franchisee · Patrice & Associates Franchising, Inc. (PAF, our predecessor) · filed 2017-07-19 · First Judicial District of Minnesota; arbitration · CV-17-629
“… No CV-17-629 (First Judicial District of Minnesota) Franchisee and regional developer, Mark Fischer, was in default under both his Franchise Agreement and his Regional Development Agreement.”Page 10 of the 2025 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

History of litigation including concluded misrepresentation/breach claims plus pending fraudulent inducement lawsuit alleging failure to disclose earnings
Pending Sweeney lawsuit specifically alleges failure to disclose earnings — red flag for systemic earnings misrepresentation to franchisees

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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