FDD Items 3 & 4 · 2026 filing
Purosystems litigation history
What Purosystems 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
- 4
- Item 3, as counted in the filing
- Largest disclosed settlement
- $33K
- 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
Pending: Born Active, LLC v. PuroSystems (franchisee suit alleging breach of contract, fraud, CA franchise law violations, filed Feb 2026, unresolved). Prior: PuroSystems v. DePaoli (AAA arbitration, unpaid royalties, settled 2022 for $32,702.50). Other Item 3 actions during last fiscal year: PuroSystems v. Katz (AAA, unpaid royalties $62,981.56, settled Oct 2025) and PuroSystems v. Schatz/SB Enterprises (AAA, unpaid royalties $608,935.38, counterclaim for wrongful termination, in discovery).
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?