Item 3 litigation data from 985 parsed FDDs: Subway leads with 93 disclosed actions, 61.2% of brands disclose zero, and per-unit rates flip the ranking.
Quick answerSubway's franchisor, Doctor's Associates, discloses 93 legal actions in Item 3 of its 2026 FDD, the most of any brand among 985 FDDs parsed by VetMyFranchise. Spread across 18,773 US franchised units, that is roughly 5 suits per 1,000 units. 61.2% of parsed brands disclose zero litigation.
Subway’s franchisor, Doctor’s Associates LLC, discloses 93 separate legal actions in Item 3 of its 2026 FDD, the most of any brand in the 2,000+ FDDs VetMyFranchise has analyzed. The raw count is less damning than it looks. Spread across 18,773 US franchised units, it comes to roughly 5 disclosed actions per 1,000 units, a lower rate than dozens of much smaller systems. Meanwhile, 61.2% of the brands we have parsed disclose no litigation at all. Below is the full ranking, the per-unit math that reorders it, and how to read a litigation count without scaring yourself out of a good deal or into a bad one.
Every franchisor must disclose its material legal history in Item 3 of the Franchise Disclosure Document under the FTC Franchise Rule (16 CFR 436). That includes pending actions, certain convictions and injunctions, material civil suits from roughly the past 10 years, and actions the franchisor itself filed against franchisees during its last fiscal year. We parse those disclosures into a structured litigation count for each brand.
Two limits matter before you read the table.
Coverage: 985 of 2,126 brands. Item 3 parsing has completed for 985 of the 2,126 ready FDDs in our database as of July 2026, about 46%. Every ranking below reflects that parsed set. A brand you don’t see here may simply not have parsed litigation data yet, so treat this as the most-litigated brands we can currently measure, not a complete census of franchising.
A count is context, not a verdict. Item 3 includes suits franchisees filed against the franchisor, routine contract and trademark disputes, and cases that settled years ago. The rule also sweeps in predecessors and certain parents and affiliates, which is how a three-unit startup can carry 15 disclosed actions (more on that below). Confidential arbitration cuts the other way: it keeps many real disputes out of the count entirely, so zero disclosed suits does not mean zero conflict.
Counts come from each brand’s most recent parsed FDD. The per-unit column is the one worth staring at.
| Franchisor (brand) | Item 3 actions | Franchised units | Actions per 1,000 units |
|---|---|---|---|
| Doctor’s Associates (Subway) | 93 | 18,773 | 5.0 |
| Boost Franchise Systems (Boost Home Healthcare) | 15 | 3 | n/m* |
| Citadel Panda Express (Panda Express) | 15 | 184 | n/m** |
| CarePatrol | 14 | 215 | 65.1 |
| IHOP Franchisor (non-traditional program) | 13 | 1,693 | 7.7 |
| JTH Tax (Liberty Tax) | 12 | 1,537 | 7.8 |
| Cornwell Quality Tools | 12 | 811 | 14.8 |
| At World Franchising (@properties) | 11 | 5 | n/m* |
| Charles Schwab & Co. | 10 | 95 | n/m* |
| Bimbo Foods Bakeries Distribution | 9 | 6,957 | 1.3 |
| OpenWorks (O.P.E.N. America) | 9 | 402 | 22.4 |
| Sylvan Learning | 9 | 433 | 20.8 |
| Signal 88 (security) | 9 | 1,883 | 4.8 |
| IHG Franchising (single-brand hotel FDD) | 8 | 55 | n/m* |
| PB Franchising (Pure Barre) | 8 | 617 | 13.0 |
Source: Item 3 counts parsed from each brand’s most recent FDD (2026 filings; Bimbo Bakeries 2025), VetMyFranchise database, as of July 2026.
* Fewer than 100 franchised units, or a brand-level FDD covering one slice of a larger company; a per-unit rate would mislead more than inform.
** Panda Express runs 2,423 company-owned locations against just 184 franchised, so its Item 3 docket travels with the whole company rather than its small franchise program.
Why Subway tops the list. Size explains most of it: no other US system comes close to 18,773 franchised units, and Item 3 counts grow with every unit and every year of history. The rest is a genuinely long record of franchisee friction. Subway’s franchise agreement routes disputes to arbitration in Connecticut, and fights over that clause alone reached the US Supreme Court in Doctor’s Associates v. Casarotto (1996). Later decades brought franchisee-association suits, development-agent conflicts, and a discrimination claim by a prospective buyer. So the 93 is real, and it reflects a system where tension between the company and its operators is a recurring theme. On a per-unit basis, though, Subway’s 5 actions per 1,000 units is milder than Cornwell’s 14.8 or OpenWorks’ 22.4.
The oddballs are disclosure rules at work. Boost Home Healthcare shows 15 actions with only 3 franchised units because it sits inside Best Life Brands, the private-equity platform that also owns CarePatrol, ComForCare, Blue Moon Estate Sales, and Next Day Access. Item 3’s affiliate and predecessor rules mean each sister FDD carries much of the portfolio’s combined docket, which also inflates CarePatrol’s 14. Charles Schwab appears because its independent branch program is legally a franchise (95 franchised branches next to 287 company-owned), and its 10 actions are the ordinary docket of a national broker-dealer, not branch operators suing headquarters. Bimbo Bakeries franchises roughly 7,000 delivery routes; its disputes are mostly with route distributors, including worker-classification claims, and at 1.3 actions per 1,000 units it has the lowest rate in the table.
Zoom out from single brands and industry patterns emerge. This table covers every industry with at least 25 parsed FDDs.
| Industry | Brands parsed | Share disclosing 1+ action | Avg. actions per brand |
|---|---|---|---|
| Business Services | 42 | 61.9% | 1.5 |
| Financial Services | 25 | 48.0% | 1.9 |
| Cleaning & Maintenance | 67 | 47.8% | 1.4 |
| Real Estate | 30 | 46.7% | 1.1 |
| Retail | 57 | 45.6% | 1.2 |
| Home Services | 142 | 43.7% | 0.9 |
| Health & Beauty | 45 | 42.2% | 1.0 |
| Automotive | 31 | 41.9% | 0.9 |
| Pet Services | 34 | 38.2% | 0.8 |
| Fitness & Wellness | 79 | 38.0% | 1.4 |
| Hospitality & Travel | 31 | 35.5% | 1.2 |
| Senior Care | 59 | 33.9% | 1.3 |
| Food & Beverage | 252 | 30.6% | 1.1 |
| Child Services & Education | 64 | 29.7% | 0.8 |
Source: 985 FDDs with parsed Item 3 data, VetMyFranchise database, July 2026.
Business services and financial services brands sit at the top, which tracks with how those models work: B2B contracts, licensing disputes, and regulatory exposure generate paper. Commercial cleaning’s 47.8% partly reflects the unit-franchising model, where master franchisors sell hundreds of small territories and disputes over account guarantees are a recurring genre. The surprise is food and beverage at 30.6%, near the bottom despite Subway’s headline number. Most restaurant franchisors, including some very large ones, disclose a clean Item 3.
Vetting a brand’s legal history? The $49 FDD analysis reads Item 3 and Item 4 line by line, flags the suit types that predict trouble, and scores the contract terms you’d be signing: see a full sample report.
Scale does not force litigation. These systems each run more than 1,000 franchised units and disclose zero Item 3 actions in their most recent parsed FDD:
A clean Item 3 at that scale says something real about franchisee relations. It is still not proof of peace. Settlements reached before a complaint is filed, confidential arbitration, and the rule’s materiality thresholds all keep disputes off the page. Pair the Item 3 read with validation calls to current and former franchisees before you weight it heavily.
Ninety-three routine cases can matter less than three ugly ones. When you read an Item 3, sort the entries into buckets:
High-signal suits. Fraud, misrepresentation, and unauthorized earnings-claim allegations by franchisees are the most predictive, because they attack the sales process you just went through. Clusters of termination and non-renewal disputes suggest the franchisor churns operators. Regulatory actions by the FTC or state franchise administrators are rare and serious.
Lower-signal suits. Trademark enforcement against infringers, vendor contract disputes, and one-off employment claims are the cost of running any large business. A franchisor suing to protect its mark is doing its job.
Franchisor-initiated collections. Item 3 also lists suits the franchisor filed against its own franchisees in the past fiscal year. A long list of collection and termination actions can mean strict brand enforcement, or it can mean a system full of operators who stopped paying because units don’t earn. Cross-check against the other red flags hiding across all 23 FDD items, and use our legal agreement scoring guide to see whether the contract stacks the deck before disputes ever start.
Item 4, the bankruptcy disclosure, is Item 3’s quieter neighbor, and the overlap between the two is where risk concentrates. Of roughly 1,050 FDDs we have parsed for Item 4, only 24 disclose a bankruptcy involving the franchisor, a predecessor, or an officer. Half of those, 12 brands, also disclose Item 3 litigation. A franchisor fighting franchisee lawsuits while carrying that history has two independent warning lights on at once, and the combination deserves more diligence than either flag alone. Our guide to Item 4 bankruptcy disclosures covers what counts, who must report, and the 10-year lookback.
A litigation count opens the conversation; these questions finish it.
If you’d rather have the legal history read for you, the $49 FDD analysis covers Item 3 suit-by-suit alongside the other 22 items and ends with a plain-English buyer verdict. You can also compare litigation counts, closure rates, and fees across 2,000+ franchise brands before you shortlist anything.
Subway's franchisor, Doctor's Associates LLC, discloses 93 legal actions in Item 3 of its 2026 FDD, the highest count among the 985 FDDs with parsed litigation data in the VetMyFranchise database. Scale matters here: with 18,773 US franchised units, that works out to roughly 5 disclosed actions per 1,000 units, a lower rate than many far smaller systems.
No. Item 3 covers roughly a 10-year window, includes suits filed by franchisees as well as against them, and naturally scales with system size. A handful of routine contract disputes across thousands of units is normal. The pattern that should stop you is repeated fraud, misrepresentation, or earnings-claim allegations in a small or shrinking system.
Item 3 of the Franchise Disclosure Document lists the material legal actions a franchisor must disclose. You can download FDDs free from state portals such as Wisconsin's DFI, California's DFPI, and Minnesota's CARDS system, or request one directly from the franchisor, which must deliver it at least 14 days before you sign.
38.8% of the 985 FDDs with parsed Item 3 data disclose at least one legal action; the other 61.2% disclose none. Disclosure rates vary widely by industry, from 61.9% of business services brands down to 29.7% of child services and education brands.
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