Federal Court Gives Green Light to Quiznos Franchisees on All Claims in Nationwide Class Action
March 6th, 2008 | 
Author: I believe this is a major turning point for franchisees in general and I think this could have a big impact on the pending lawsuit against Dream Dinners. For many months Quiznos has given the appearance of thumbing their nose at their owners by all but ignoring their claims, even after multiple lawsuits were filed. Sure, Quiznos seemed to make some changes at the top, but are the owners any better off? Are they profitable now? If nothing else, the owner’s side of the story will be heard and considering some of the tragic stories that have surfaced in regard to Quiznos, that can only be a good thing.
Considering other corporations such as Dairy Queen, Burger King, Panera Bread and Dream Dinners are being taken to task we may see franchises live up to the promises they made when they sold their “system†to owners. Perhaps they will take their owners a little more seriously and treat them as valued employees customers rather than just as a way to fill their own pockets with millions in revenue.
Story below:
In a decision with nationwide implications, Federal District Judge Wiley Y. Daniel refused to dismiss any of the claims alleged in a class action lawsuit filed by several franchisees of the Quiznos submarine sandwich chain in the United States District Court for the District of Colorado, Bonanno, et al. v. The Quizno’s Franchise Company, LLC, et al. — Case No. 06-CV-02358(WYD)(KLM).
The decision, issued yesterday, states that after carefully considering both sides’ legal positions, the franchisees have alleged valid claims for, among other things, violations of the Colorado Consumer Protection Act, breaches of the covenant of good faith and fair dealing, fraud, as well as a declaratory judgment that the franchise agreements signed by the franchisees are “unconscionable.”
The class action lawsuit, which seeks compensatory and punitive damages, alleges that Quiznos unlawfully collected over $75 million in franchise fees from more than 3,000 franchisees across the United States that never opened a store. Refunds of those fees were not rendered despite Quiznos’ failure to provide contractually-required site selection services to the franchisees in a timely manner. The suit, originally filed in a New Jersey state court on February 16, 2006, is currently pending in the United States District Court for Colorado.
“This is the correct result. Quiznos has publicly tried to discredit the claims alleged by franchisees against the company, calling them ‘meritless’ and ‘tired.’
Read the rest of the story here:
Other Articles of Interest:
- Quiznos Franchisees Move Class Action Fight to Wisc. State Court
- Dropped by Forbes but picked up elsewhere
- Why aren’t there more lawsuits?
- Quiznos Initiates Lease Renegotiation Program to Benefit Franchise Owners
- Franchisor Attorney Lawsuits Evolve
- Under-Capitalization Is The Single Biggest Reason For Franchisee Failure?
- We are not alone…
- Why Your Quiznos Won’t Give You a Free Sub
- Blogger Kings Caught Telling Whoppers
- Quiznos serves up a turnaround sandwich
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Just a comment about the article above.
“Perhaps they will take their owners a little more seriously and treat them as valued employees rather than just as a way to fill their own pockets with millions in revenue.”
This epitimizes the view point that the ZORs have. ZEEs shouldn’t be looked on a valued employees. They should be looked at as the customer.
To put it in words that are compatible to other business….ZORs are the manufacturers. They sell their product to a Distributor/Retailer (the ZEEs). The consumer then buys the end product from the ZEE.
The manufacturer still has the responsibility to supply a reputable, safe and quality product to the end consumer. However, their immediate customer (NOT employee) is the ZEE. The ZEE is paying for the product…paying for the right to sell that product, use that name. The ZOR may lay the ground rules for using that name and handling that product, but they have a DIRECT relationship and responsibility to the ZEE and like any busines…..the ZORs should be listening to their customers.
They should be asking them….how can we improve the system to help you…make your sales better….provide better services….cut your overhead. Because…if the ZEE makes money…the ZOR makes money.
Figure it out ZORs.
Amen. They need to take responsbility for the product. Yes the relationship is a bit different than business to consumer but selling a product they KNOW to be flawed should still be a crime…especially when the consequences are so much more dire than buying a defective candy bar.
You’re right, I got ahead of myself in typing. The ZEE is the customer and needs to be treated with the same level of respect and commitment to success that the ZEE gives to the traditional customer who walks through the door. That doesn’t appear to be happening and I think we’re starting to see the results of that “neglectâ€.
To expand on what “Guest†says above.
Don’t underestimate what effect the fact that the “customers†(zee’s) in this scenario are contractually obligated to purchase from the zor.
What happens when you have a monopoly? They have a built in customer base that can’t shop around. I’m not saying the franchising can’t work; clearly it does in many instances. What make franchising look bad are the zor’s that take advantage of this situation without seeing that eventually they have just created a house of cards destine to fall.
MB
(Trying to be pithy for a change)
On a side note, could people please think of some fun name to use when posting instead of using “guest� You can remain anonymous and not use guest as your name.