FDD Items 3 & 4 · 2025 filing
Schmidt Baking Distribution (dba Schmidt) litigation history
What Schmidt Baking Distribution (dba Schmidt) 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
- 8
- Item 3, as counted in the filing
- Largest disclosed settlement
- Not extracted
- 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 pending federal class/collective actions (Silva v. Schmidt in D. Conn.; Franzone v. Schmidt in E.D. Pa.) alleging misclassification of Distributors as independent contractors rather than employees; one concluded case (Adragna et al. v. Schmidt, M.D. Pa.) settled for $300,000 in Dec 2024; one concluded case (Gray/Jackson v. Schmidt, D. Md.) settled via arbitration for $72,500 and $110,000 respectively; franchisor also filed 3 arbitration demands against franchisees in the last fiscal year; a 2019 Maryland Securities Division consent order for selling unregistered franchises, with a $32,500 penalty and rescission offers.
Disclosure signals that moved the score
How this shows up in the verdict
- Two pending federal misclassification class/collective actions plus $300K settlement
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?