Item 3 summarizes material litigation involving the franchisor, its affiliates and its executives. This includes pending actions, past convictions, civil judgments and administrative claims.
Litigation disclosures help prospects evaluate:
legal risks
system stability
enforcement trends
past disputes involving franchisees
High litigation volume is a red flag for many buyers.
Item 3 must disclose:
pending lawsuits
criminal convictions
certain civil actions
administrative or regulatory actions
franchisee related litigation involving the system
material claims resolved in the last fiscal year
Franchise Disclosure Document
FDD Renewal
Material Change
Franchise Examiner
Franchise Exemption
Notice Filing State
Non Registration State
Registration Filing State
Stop Order
Franchise Registration Management
Franchise Territory Mapping
Demographic Analysis
Integrated Document Signing
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Last updated: November 26, 2025
