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QUIZNOS FRANCHISE ASSOCIATION ORGANIZER BLOCKS
QUIZNOS' EFFORTS TO CLOSE DOWN HIS FRANCHISES
Dateline: August 31, 2005 ... Los Angeles, CA
Contact Name: Fred S. Pardes, The Law Offices Of Fred S. Pardes
Contact Phone: (949) 443-3400
Contact Fax: (949) 443-3601
Web Address: fredpardes.com
"David" Wins First Round vs. "Goliath" and Clears Path for Next Battle.
LOS ANGELES, CA - August 31, 2005 In a precedent setting decision,
the Los Angeles Superior Court issued a ruling which stopped Quiznos
efforts to shut down one of its dissatisfied California franchisees,
who had organized the "Quiznos Franchisees Association" to deal with
Quiznos' continuous and total disregard of the economics interests of
its nationwide franchisees. In an effort to thwart the Association's
activities, Quiznos had further attempted to force the California
franchisee to attend an arbitration proceeding more than one thousand
miles away at Quiznos Corporate Headquarters in Colorado.
Starting in 2004, Quiznos Franchise owners Bob and Ratti Baber
alleged in their LA Superior Court South, Action, Case NC 036893, that
Quiznos breached their earlier promise of no competing franchises
within two miles of their franchises, and the "Implied Covenant of Good
Faith and Faith Dealing", by encroaching upon their two territories, by
placing new Quiznos franchises less than two miles of their
Southern California stores. The demographics and profits to
surrounding franchises clearly showed that the neighborhood could not
support the introduction of two new stores in the area. Despite
repeated requests for Quiznos to cease encroaching upon their
territory, Quiznos placed one new store within 1.1 miles from their
845th restaurant and soon thereafter placed another store within 1.6
miles of their 1366th restaurant.
To protect their very substantial investment and avoid further
financial exposure to two long term and expensive store leases and to
force Quiznos to address many issues of fellow Quiznos franchise
Owners, Baber formed the Quiznos Franchisee Association.
In an effort to intimidate the Babers and stop the growth of the
Association, Quiznos increased the pressure and difficulties of store
operation by scheduling incessant inspections and providing constant
criticism of the store's maintenance over relatively minor and
insignificant matters.
Overburdened and unnecessarily placed under great stress by Quiznos'
failure to address critical "franchisee" issues such as territorial
encroachment, inadequate and ineffective advertising, and excess fees
and charges affecting all fellow Quiznos franchisees, the Babers
sought support from their fellow like-minded Quiznos franchisees. When
the Babers efforts to organize other frustrated Quiznos franchisees
started to become effective, Quiznos, attempted to terminate their
two franchises and subsequently sue the Babers for trademark
violations under the Lanham Act.
In the Baber's lawsuit, they allege that Quiznos attempted to
wrongfully terminate their two franchises in retaliation for their
formation and organization of the Quiznos Franchisee Association.
Quiznos subsequently filed a "Request for Preliminary Injunction" to
shut down the Baber's two California stores, as well as a "Motion to
Compel Arbitration", which would force the Babers to attend arbitration
in Quiznos home state of Colorado, despite all pertinent actions,
events, and witnesses taking place and residing in Los Angeles County.
On August 26, 2005, before Judge Joseph E. DiLoreto, the Court denied
both of Quiznos' Requests for a Preliminary Injunction and a Motion
to Compel Arbitration in Colorado. The court also ordered arbitration
to take place in Los Angeles county, the county where both of the
Baber's Franchisees are located.
These two rulings follow the modern trend of the courts protecting the
small franchisee owner against oppressive and abusive actions of
Franchiser Corporations.
For more information, please contact Fred S. Pardes, Esq. at 34211
Pacific Coast Highway, Suite 103 Dana Point, CA 92629 or call (949)
443-3400 or fax (949) 443-3601, or email fred@fredpardes.com.
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