FDD Items 3 & 4 · 2024 filing

Sunmed | Your CBD Store litigation history

What Sunmed | Your CBD Store 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: 5; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $12K; As stated in Item 3

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

Franchisor/affiliate involved in multiple suits: contract/trade-secret suit against former distributor (settled 2022, confidential); enforcement actions against terminated franchisees for restrictive covenants (Naturoil Georgia settled $12,000; Buckwalter/Kannabliss AAA arbitration award $363,276.09 affirmed, franchisee later filed bankruptcy); counterclaim in Gradwell et al v. Sunflora (settled); arbitration by Perfect Synergy against Franchisor over airport territory dispute (motion to dismiss denied, ongoing).

Item 3 (litigation) · 5 matters disclosed · 1 pending listed

Litigation cases

The franchisor

Pending (1)

Perfect Synergy, LLC (Claimant (Franchisee) v. Your CBD Stores Franchising, LLC (Respondent (Franchisor))
pending
Brought by a franchisee · filed 2023-07-25 · American Arbitration Association · 01-23-0003-7322
“… pursuant to American Arbitration Association (AAA) binding arbitration proceedings, Case Number: 01-23-0003-7322, filed originally July 25, 2023.”Page 11 of the 2024 FDD, Item 3

Concluded (2)

Your CBD Stores Franchising, LLC (Franchisor) and Sunflora, Inc. v. Naturoil Georgia, LLC, et al.
settled
Brought against a franchisee · filed 2022-01-24 · U.S. District Court for the Northern District of Georgia · 1:22- cv-00286-TWT
“… United States District Court for the Northern District of Georgia, Civil Action File No. 1:22- cv-00286-TWT, filed January 24, 2022.”Page 10 of the 2024 FDD, Item 3
Outcome: “The dispute was mediated and settled in March 2022, with the defendants paying a total of $12,000 to the Franchisor and Sunflora, and agreeing to certain competitive restrictions. 2.”
Your CBD Stores Franchising, LLC (Franchisor), v. Brett W. Buckwalter a/k/a Brett Harris, Your CBD Store Kansas, LLC (Franchisee) d/b/a Kannabliss and KannaCorp, LLC d/b/a Kannabliss
judgment
Brought against a franchisee · filed 2022-10-11 · American Arbitration Association · 01-22-0003-3568
“… pursuant to American Arbitration Association (AAA) binding arbitration proceedings, Case Number: 01-22-0003-3568, filed originally October 11, 2022.”Page 10 of the 2024 FDD, Item 3
Outcome: “the Arbitrator ruled in favor of Franchisor and awarded $363,276.09 in damages, including attorneys' fees, administrative fee, and other costs.”

Parent, affiliates, master franchisor and subfranchisor

Concluded (2)

Joseph Gradwell, Christopher Miller, Greg Muiter and Melanie Vaughn v. Sunflora, Inc.
settled
Brought by the franchisor · Sunflora, Inc. (our affiliate) · filed 2022 · U.S. District Court for the Middle District of Florida, Tampa Division · 8:22-cv-00781-MSS- TGW
“… United States District Court for the Middle District of Florida, Tampa Division, Case No. 8:22-cv-00781-MSS- TGW.”Page 11 of the 2024 FDD, Item 3
Outcome: “July 2023, a settlement agreement was executed whereby Plaintiffs agreed to a payment and other concessions to the benefit of Sunflora.”
Sunflora, Inc. v. The Natural Solutions, LLC, et al.
settled
Brought by the franchisor · Sunflora, Inc. (our affiliate) · filed 2020 · U.S. District Court for the Central District of California · 2:20-cv-01141- CJC-MRW
“… United States District Court for the Central District of California, Case No. 2:20-cv-01141- CJC-MRW.”Page 10 of the 2024 FDD, Item 3
Outcome: “The matter was settled in June 2022 and TNS agreed to remit a payment to the benefit of Sunflora. The payment was in an amount that is required by Consent Order to be maintained as confidential.”

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

Five separate litigation cases including franchisor enforcement actions and franchisee disputes over territory rights indicate systemic relationship problems

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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