FDD Items 3 & 4 · 2024 filing

Pizza Boli's litigation history

What Pizza Boli's disclosed about lawsuits, arbitrations and bankruptcy in the 2024 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: 8; 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: 2024; Disclosures cover the prior ten years

Extracted from the 2024 Franchise Disclosure Document

Item 3: litigation

8 matters: Virginia SCC investigation re unregistered franchise offers; shareholder derivative suit (settled 2024); Maryland Securities Commissioner Consent Order (2024, $35K penalty); Prosperity v. franchisee (breach/unauthorized transfer, settled 2024); Prosperity v. former franchisee (breach/post-term competition, dismissed 2021); Lubin v. Prosperity (2004 Consent Order); two prior Maryland Securities Commissioner Consent Orders (2002)

Item 3 (litigation) · 8 matters disclosed · 1 pending listed

Litigation cases

The franchisor

Pending (1)

Pizza Boli’s/Prosperity Systems Before the Division of Securities and Retail Franchising of the Virginia State Corporation Commission
pending
Government or regulatory action · filed 2021-07-15 · Virginia State Corporation Commission, Division of Securities and Retail Franchising
“Prosperity Systems Before the Division of Securities and Retail Franchising of the Virginia State Corporation Commission.”Page 10 of the 2024 FDD, Item 3

Concluded (7)

In the Matter of Prosperity Systems, Inc. d/b/a Pizza Boli’s
concluded
Government or regulatory action · filed 2024-07-19 · Securities Commissioner of Maryland · 2021-0119
“… Case No. 2021-0119 Before the Securities Commissioner of Maryland.”Page 11 of the 2024 FDD, Item 3
Prosperity System, Inc. v. Choudry Basharat and Huntsman Pizza, Inc.
settled
Brought against a franchisee · filed 2023-01-09 · Maryland Circuit Court for Baltimore County · C-03- CV-23-000109
“… No. C-03- CV-23-000109 (Maryland Circuit Court for Baltimore County, Filed January 9, 2023).”Page 11 of the 2024 FDD, Item 3
Outcome: “filed a joint stipulation for voluntary dismissal of the case after entering into a settlement agreement under which Basharat agreed to pay Prosperity $21,480 and to return the Pizza Boli’s Operations Manual and Recipe Book.” (page 12)
Shah v. Nasir and Prosperity Systems, Inc.
settled
Brought by a third party · filed 2021-09-14 · Maryland Circuit Court for Baltimore County (transferred from Montgomery County) · C-03-CV22-0005484; 487180
“… Case No. C-03-CV22-0005484 (Md. Circuit Court for Baltimore County (Filed September 14, 2021 as Case No. 487180 in Md. Circuit Court for Montgomery County).”Page 11 of the 2024 FDD, Item 3
Outcome: “the court entered a Civil Settlement Court Order indicating that the case was resolved with a settlement placed on the record.”
Prosperity System, Inc. v. Shah Dildar
dismissed
Brought against a franchisee · filed 2019-02-13 · U.S. District Court for the District of Maryland · 1:19-cv-415
“… No. 1:19-cv-415 (U.S. District Court for the District of Maryland, Filed February 13, 2019).”Page 12 of the 2024 FDD, Item 3
Outcome: “On June 15, 2021, Prosperity and Dildar filed a joint stipulation for voluntary dismissal, which the court granted on June 16, 2021. 6.”
Lubin v. Prosperity Systems, Inc., Javed Nasir, and Syed Zakir Hussein Shah
concluded
Government or regulatory action · filed 2004-05-03 · Maryland Circuit Court for Baltimore City · 24-C-04-003684
“… Case No. 24-C-04-003684 (Maryland Circuit Court for Baltimore City).”Page 12 of the 2024 FDD, Item 3
In the Matter of Prosperity Systems, Inc. d/b/a Pizza Boli’s (No. 2001-0813)
concluded
Government or regulatory action · filed 2002-01-10 · Securities Commissioner of Maryland · 2001-0813
“In the Matter of Prosperity Systems, Inc. d/b/a Pizza Boli’s, Case No. 2001-0813, Before the Securities Commissioner of Maryland,.”Page 12 of the 2024 FDD, Item 3
In the Matter of Prosperity Systems, Inc. d/b/a Pizza Boli’s (No. 2002-0294)
concluded
Government or regulatory action · filed 2002-04-16 · Securities Commissioner of Maryland · 2002-0294
“In the Matter of Prosperity Systems, Inc. d/b/a Pizza Boli’s, Case No. 2002-0294, Before the Securities Commissioner of Maryland.”Page 13 of the 2024 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

Multiple breach of contract lawsuits against former franchisees suggests either corporate non-performance or pattern of franchise terminations

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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