Franchise Glossary
Litigation History
A record of past and pending lawsuits involving the franchisor, its officers, or the franchise system.
Item 3 of the FDD discloses the franchisor's litigation history over the past 10 years, including lawsuits brought by or against the franchisor and certain legal actions involving key executives. While some litigation is normal for any large franchise system, patterns of franchisee lawsuits alleging fraud, misrepresentation, or breach of contract are significant red flags. Reviewing litigation history with a franchise attorney can reveal recurring issues that may affect your investment.
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