FDD Items 3 & 4 · 2025 filing
The Yellow Chilli litigation history
What The Yellow Chilli 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
- 2
- Item 3, as counted in the filing
- Largest disclosed settlement
- $15K
- As stated in Item 3
- 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
Mormukut Inn Pvt. Ltd. (Franchisee) v. S.K. Restaurants Pvt. Ltd. (Franchisor): Three cases filed in 2015-2016 (Arbitration Case No. 400/2015 at District Court Agra; Arbitration Case No. 99/2015 at High Court Allahabad; Case No. 1101/2016 at Court of CJM Agra) alleging unfair acts in franchise offer/sale. Settled November 14, 2016 with franchise termination, withdrawal of all cases, and Rs. 1,00,00,000 payment to Franchisee. California Department of Business Oversight administrative action (Consent Order ID: 213620, May 7, 2020): Franchisor offered franchises in California via 'Letter of Intent' and 'Interim Franchise Agreement' documents (Feb 2016-Jan 2018) to three entities without proper franchise registration or FDD disclosure in violation of California Corporations Code sections 31110 and 31119. Resolved via Consent Order with $15,000 penalty and requirement to serve updated FDD and rescission offer to affected franchisees; all three declined rescission.
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?