FDD Items 3 & 4 · 2025 filing
Swthz litigation history
What Swthz 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
- 2
- 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
Walker Edison Furniture Company, LLC and Blue Owl Capital Corporation v. Bonham, et al. (Consolidated Case No. 230902160, Third Judicial District Court, Salt Lake County, Utah) - consolidated May 23, 2024, currently in discovery. Walker Edison alleges insolvency and constructive fraudulent transfer related to leveraged recapitalization and dividend. Blue Owl alleges civil conspiracy, fraudulent inducement of loans, and constructive/fraudulent transfer. HotBox Enterprises, LLC v. Legendary Sweat, LLC, et al. (No. 20GDCV00469, consolidated with Jamie Weeks v. Jessica Mortarotti, et al., No. 20STCV20681, California Superior Court, Los Angeles County) - filed June 1, 2020.
Item 3 (litigation) · 2 matters disclosed · 1 pending listed
Litigation cases
Parent, affiliates, master franchisor and subfranchisor
Concluded (1)
HotBox Enterprises, LLC v. Legendary Sweat, LLC, et al. (consolidated with Jamie Weeks v. Jessica Mortarotti, et al.)
settledBrought by the franchisor · Legendary Sweat, LLC (LS Opco) · filed 2020-06-01 · California Superior Court, County of Los Angeles · 20GDCV00469
“HotBox Enterprises, LLC v. Legendary Sweat, LLC, et al., No. 20GDCV00469 (the “HotBox Lawsuit”), consolidated on March 24, 2021, with Jamie Weeks v. Jessica Mortarotti, et al, No. 20STCV20681 (the “Related Lawsuit”), both filed in the California Superior Court, County of Los Angeles.”Page 11 of the 2025 FDD, Item 3
Officers and directors (individuals, not the company)
Pending (1)
Walker Edison Furniture Company, LLC v. Bohnam, et. al.; Blue Owl Capital Corporation v. Bonham, et. al.
pendingKyle Casella (Treasurer & Assistant Secretary) · filed 2023-03-30 · Third Judicial District Court for County of Salt Lake, State of Utah · 230902160
“… Consolidated Case No. 230902160, filed in the Third Judicial District Court for County of Salt Lake, State of Utah.”Page 10 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.
Disclosure signals that moved the score
How this shows up in the verdict
- Two suits with fraudulent-transfer/civil-conspiracy claims against Treasurer
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?