FDD Items 3 & 4 · 2025 filing
Sit Means Sit litigation history
What Sit Means Sit 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
- 3
- 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
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
Franchisor sued former Texas/North Carolina franchisee (SMSHTX/SMS NC/Parvizian) for breach of contract and non-compete violations after terminating for non-payment; obtained default judgment with $46,800 liquidated damages and $74,520.07 attorney fees (2024). Also disclosed two historical state consent orders: Maryland Securities Division (2012) - affiliate SMSI sold unregistered franchises via MLAs, $2,000 civil penalty; Minnesota Dept. of Commerce (2009) - SMSI sold an unregistered franchise, $1,000 civil penalty.
Item 3 (litigation) · 3 matters disclosed
Litigation cases
The franchisor
Concluded (2)
Sit Means Sit Franchise, Inc. v. SMSHTX, LLC, SMS NC, LLC, Hamid Parvizian, and Joseph Arnette
judgmentBrought against a franchisee · filed 2023-09-20 · United States District Court for the District of Nevada · 2:23-cv-01464-CDS-DJA
“… in the United States District Court for the District of Nevada, Case No. 2:23-cv-01464-CDS-DJA.”Page 10 of the 2025 FDD, Item 3
Maryland Consent Order
concludedGovernment or regulatory action · filed 2012-09-19 · Securities Division of the Office of the Attorney General of Maryland · 2012-0362
“… (Case No. 2012-0362). On or about September 19, 2012, the Securities Division of the Office of the Attorney General of Maryland entered into a stipulated Consent Order with us and with our affiliate, Sit Means Sit, Inc. (“SMSI”) entered”Page 10 of the 2025 FDD, Item 3
Parent, affiliates, master franchisor and subfranchisor
Concluded (1)
Minnesota Consent Order
concludedGovernment or regulatory action · Sit Means Sit, Inc. (SMSI, our affiliate) · filed 2009-09-01 · Minnesota Department of Commerce · FR2900235/DPK
“… (Case No. FR2900235/DPK). On or about September 1, 2009, the Minnesota Department of Commerce and our affiliate, Sit Means Sit, Inc. (“SMSI”) entered into a stipulated Consent Order in which the state alleged that SMSI sold an”Page 11 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.
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?