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Item 3 covers specified proceedings
The item specifies covered people and companies, claim categories and relevant periods. It includes specified pending matters, certain franchise-relationship actions and qualifying historical outcomes or orders. It is not a list of every disagreement.
Match the entity and proceeding to the prescribed item when preparing disclosure. A case with a similar company name, or any real case mentioned elsewhere on this site, is not automatically a required Item 3 entry.
Ask what the record actually establishes
A complaint states allegations. A settlement can end a dispute without a contested trial, but its admissions and obligations depend on its actual terms. A judgment must be read for what was decided and how; an amount ordered is not proof that the money was recovered.
If a dispute concerns promised support, compare that promise with the support you now offer and can deliver. Do not dismiss a pending claim as meaningless or present it as a finding of fraud. The linked court-record guide explains these record types.
Scope
- This explains how to read the specified litigation disclosure, not a complete disclosure-category checklist or a universal disputes search.
Next step
Read the identified complaint, order or settlement and establish the correct party and status before describing the dispute.
Sources & review notes
Federal Franchise Rule
FTC overview · Compliance Guide · Guide PDF · Current regulation
Federal Trade Commission
Passage, dates and research notes
primary · Item 3: Litigation
Has pending against that person
Current substantive item read in full from current eCFR. This guide explains selected management implications; it is not a substitute for all prescribed disclosure text.
Federal Trade Commission
Passage, dates and research notes
primary · section-436.6
Respond fully to each disclosure Item.
Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.
Detailed rule records (1)
Item 3 has defined entities, people, claim categories and time periods. It includes specified pending matters, certain franchise relationship actions and qualifying historic outcomes or orders. An allegation is not a finding, and the item is not every dispute anyone has ever had.
16 CFR §436.5(c): FDD Item 3Keep this reading in your learning library.
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This is a reading aid, not evidence of disclosure delivery, expertise or legal approval.