FDD Items 3 & 4 · 2025 filing
Teriyaki Madness litigation history
What Teriyaki Madness 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
- 1
- Item 3, as counted in the filing
- Largest disclosed settlement
- $150K
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
One arbitration: M.H. Franchise Company Inc. v. Stephen Alexander et al. (AAA, Denver, CO, Case No. 01-24-0008-3563). Franchisor filed an arbitration demand against a former franchisee for breach of contract over premature closure of Teriyaki Shops in AZ and FL; respondents counterclaimed for fraudulent inducement, misrepresentation, securities-law violations, and deceptive trade practices.
Disclosed in the 2025 Franchise Disclosure Document
Item 4: bankruptcy
Patrick Pounders, Franchise Development Manager, filed Chapter 13 bankruptcy petition May 22, 2017 (Case No. 17-14737-JGR, U.S. District Court, District of Colorado). Plan confirmed September 13, 2017 and dissolved September 2022.
Disclosure signals that moved the score
How this shows up in the verdict
- Active litigation with counterclaims alleging misrepresentation and inadequate franchisor support—suggests systemic operational or support issues
- Litigation context mentions 'failure to provide support' and 'misuse of marketing funds'—indicates potential franchisor accountability and trust concerns
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?