Another class action lawsuit was filed this week as reported by Richard Gazarik at the Pittsburgh Tribune-Review: Quiznos franchise owners sue sandwich company.
I took the article into the Information Sharing Project as Record# 1,575. Here is what the Word file looks like before I split it out into the Access database. The present keywords that I extract from the article are here:
- Bankruptcy
- Churning (serial reselling)
- Coupon programs (forced) destroy franchisee margins
- Discount programs destroy retail margins but boost wholesale profits
- Encroachment (too many outlets put in territory),
- Fear of poverty
- Fear mongering
- Forced ordering
- Franchisor overcharges for required products
- Gouging on supplies
- Lawsuits just a cost of doing business
- Lawsuits, class action
- Must buy entirely useless goods and services
- Must buy only through franchisor (tied buying)
- Must pay future royalties, even when the franchise fails (liquidated damages)
- Racketeering
- System designed to fail for franchisees
- Threats of lawsuits
- Will work even when Variable Costs > than Selling price
The Future? These are the keywords that will likely fit this situation as it grinds onto the inevitable useless conclusion [if the trajectory does not change]:
- Bootstrapping the assets of a corporation
- Class-action dead end
- Credence good fraudulent expert
- Don’t owe your lawyer money
- Fee surprises at settlement time
- Federal insolvency laws used to shirk legal claims
- Franchise agreements create a License to Lie, Cheat & Steal
- Financial failure of first franchisee a material fact to the second
- Franchisor bankruptcy
- Franchisor corporation created to fail
- Franchisor insolvency, intentional
- Futility of taking legal action
- Health consequences
- Loan pushing
- Piling on: franchisor can afford a few awards but not hundreds
- Settlement just covers fees
- Sue lender for not doing their lender’s due diligence
- Sue the sales agent
- System under scrutiny withdraws membership from franchisor association
- Trading in false hope
- Within the four corners of the contract
I honestly feel for the operators but fighting this [or any other] franchisor in the Courts is just for fools and their paid cheerleaders.
Numbers 8, 14, 17 & 18: They hold some real promise as a group action.
- I wonder why the franchise bar never argues along these lines?
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Posted by Les Stewart 
