FDD Items 3 & 4 · 2025 filing
Sharetea litigation history
What Sharetea 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
- 6
- 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
Parent company Lian Fa has an ongoing trademark infringement suit against its Australian master franchisee (filed 2021). Lilian USA settled a franchisee protected-territory/trademark dispute (Tenmei Group, 2019) and a trademark infringement suit it filed against a third party (Yucheng Liu/Coolblue, settled March 2022). A personal injury suit naming Lilian USA as co-defendant (hot water burn incident) was settled. Lilian USA self-reported an unregistered franchise sale in Minnesota (consent order Sept 2022) and is subject to an ongoing Hawaii securities/franchise investigation opened March 2021. No bankruptcies disclosed.
Disclosure signals that moved the score
How this shows up in the verdict
- 6 litigation matters (mostly trademark, several settled)
- 153 units, no going-concern or bankruptcy
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?