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 (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
- $15K
- As stated in Item 3
- 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).
Item 3 (litigation) · 5 matters disclosed · 1 pending listed
Litigation cases
The franchisor and its predecessor
Pending (1)
RAINBOW INTERNATIONAL, LLC AND THE GROUNDS GUYS LLC v. CHEYENNE PARTNERS LLC AND JASON ALAN KITTS
pendingBrought against a franchisee · The Grounds Guys LLC (Predecessor) · filed 2017-09-05 · McLennan County District Court, 170th Judicial District, State of Texas · 2017-2979-4
“RAINBOW INTERNATIONAL, LLC AND THE GROUNDS GUYS LLC, Plaintiffs v. CHEYENNE PARTNERS LLC AND JASON ALAN KITTS, Defendants, in the McLennan County District Court, 170th Judicial District, State of Texas, Case No. 2017-2979-4, filed September 5, 2017.”Page 21 of the 2026 FDD, Item 3
Concluded (3)
Argus Capital Management, LLC (Argus) v. The Grounds Guys SPV LLC and Does 1-100
settledBrought by a franchisee · filed 2023-01-09 · U.S. District Court for the Eastern District of California · 1:23-at-00023
“… in U.S. District Court for the Eastern District of California, Case No. 1:23-at-00023, filed on January 9, 2023.”Page 22 of the 2026 FDD, Item 3
Outcome: “Settlement was reached via execution of a confidential settlement agreement in October of 2025 paying $15,000.00 to Argus Capital for a Stipulation of Dismissal, which was filed December 9, 2025.”
The Grounds Guys SPV LLC v. Andrew Choi and Shadow Environment, LLC
settledBrought against a franchisee · filed 2022-11-15 · District Court, 414 Judicial District, McLennan County, Texas · 2022-4024-5
“… Civil Action No. 2022-4024-5, filed on November 15, 2022, in the District Court, 414 Judicial District, McLennan County, Texas.”Page 22 of the 2026 FDD, Item 3
The Grounds Guys SPV LLC v. Mellos LLC and Dean Mellos
judgmentBrought against a franchisee · filed 2022-11-15 · District Court, 414 Judicial District, McLennan County, Texas · 2023-4023-5
“… Civil Action No. 2023-4023-5, filed on November 15, 2022, in the District Court, 414 Judicial District, McLennan County, Texas.”Page 23 of the 2026 FDD, Item 3
Parent, affiliates, master franchisor and subfranchisor
Concluded (1)
The Commissioner of Business Oversight of the State of California v. For Franchising LLC d/b/a Window Genie and Richard Nonelle
concludedGovernment or regulatory action · For Franchising LLC (predecessor of our affiliate Window Genie) · filed 2017-11-14 · Commissioner of Business Oversight of the State of California
“The Commissioner of Business Oversight of the State of California v. For Franchising LLC d/b/a Window Genie and Richard Nonelle.”Page 23 of the 2026 FDD, Item 3
Outcome: “... matter, that (a) FOR and Mr. Nonelle would desist and refrain from violations of section 31156 of the California Franchise Investment Law; (b) FOR would pay an administrative penalty in the total amount of $5,000 (which amount FOR paid) and (c) within 90 days of the date of the Consent Order, Mr. Nonelle and all persons employed by FOR who assist in preparing franchise registrations or who assist in franchise ...”
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.
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
- 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?