FDD Items 3 & 4 · 2025 filing
Waters Edge Winery & Bistro litigation history
What Waters Edge Winery & Bistro 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
- $300K
- 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
Waters Edge Wineries, Inc. filed federal complaint against franchisee Wine Vibes, LLC and principals (Sherifat Lawal, Tamesha Hampton, Phelicia Colvin) on October 26, 2022 for breach of contract, trademark infringement, false designation of origin, misappropriation of trade secrets (DTSA/CUTSA), and unfair competition. Defendants countersued. Settled September 26, 2023 with $300,000 payment (reducible to $200,000 in installments if compliant). Also concluded: California Commissioner of Financial Protection and Innovation v. Waters Edge Wineries (Consent Order, November 10, 2021) for violation of undertaking regarding promissory note payment during registration period.
Item 3 (litigation) · 2 matters disclosed
Litigation cases
The franchisor
Concluded (2)
Waters Edge Wineries, Inc. vs. Wine Vibes, LLC, Sherifat Lawal, Tamesha Hampton, and Phelicia Colvin
settledBrought against a franchisee · filed 2022-10-26 · U.S. District Court, Central District of California · 5:22-cv-01883-SB-SHK
“… (Case No. 5:22-cv-01883-SB-SHK, C.D. Cal).”Page 8 of the 2025 FDD, Item 3
Outcome: “On September 26, 2023, the parties entered into a Settlement Agreement and Mutual Release of Claims ("Settlement Agreement”) in our favor, requiring Defendants to pay us a sum of $300,000, plus interest at 12% per annum or the highest legal rate, whichever is lower (the “Settlement Amount”).” (page 9)
California Commissioner of Financial Protection and Innovation v. Waters Edge Wineries, Inc.
concludedGovernment or regulatory action · filed 2021-11-10 · California Department of Financial Protection and Innovation · FIL ORG ID: 92873
“… FIL ORG ID: 92873. On November 10, 2021, the State of California Department of Financial Protection and Innovation (the “Department”) entered into a Consent Order with us.”Page 9 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
- 3 concluded litigation matters on a small 10-unit system
- Franchisor litigation settled $300,000
- Item 19 disclosed, avg gross sales $881,555, no bankruptcy/going-concern
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?