FDD Items 3 & 4 · 2026 filing
The Grounds Guys litigation history
What The Grounds Guys disclosed about lawsuits, arbitrations and bankruptcy in the 2026 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
- 4
- Item 3, as counted in the filing
- Largest disclosed settlement
- None stated
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2026
- Disclosures cover the prior ten years
Extracted from the 2026 Franchise Disclosure Document
Item 3: litigation
Pending: Rainbow International/Grounds Guys LLC v. Cheyenne Partners/Kitts (franchisee breach/non-compete, judgment for franchisor, on appeal). Prior: Argus Capital v. Grounds Guys (fraud claims, settled $15,000 to plaintiff); Grounds Guys v. Choi/Shadow Environment (breach of contract, settled); Grounds Guys v. Mellos (breach of contract, franchisor awarded ~$102,617 damages + ~$212,831 attorneys fees). Also an administrative consent order involving affiliate Window Genie predecessor (unrelated to franchisor).
Disclosed in the 2026 Franchise Disclosure Document
Item 4: bankruptcy
No bankruptcy of the Franchisor itself; disclosure relates to bankruptcy proceedings of unrelated KKR portfolio companies (Marelli Holdings, The Collected Group, Envision Healthcare, Genesis Care, IPI Legacy Liquidation, Cafe Coffee Day) not involving the Franchisor.
Disclosure signals that moved the score
How this shows up in the verdict
- 4 litigation matters, modest for 219 units
- Bankruptcies are unrelated KKR portfolio cos, not franchisor
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?