Pizza Pizza head office protest set for Monday

The franchisees say Lorn Austin’s executive criminal record for theft, fraud and racketeering is an embarrassment to everyone in the company and makes it difficult for them to deal with the public. They also question the wisdom of company owner Michael Overs giving Austin – a man with several bankruptcies in his past – power over trust accounts holding in excess of $14 million and control over day to day operations.

The Toronto Star
May 7, 1993

Pizza Pizza head office protest set for Monday
Dale Brazao and Kevin Donovan

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Angry Pizza Pizza franchise owners say they will march on head office Monday unless the company’s executive vice-president is fired.

The franchisees say Lorn Austin’s executive criminal record for theft, fraud and racketeering is an embarrassment to everyone in the company and makes it difficult for them to deal with the public.

They also question the wisdom of company owner Michael Overs giving Austin – a man with several bankruptcies in his past – power over trust accounts holding in excess of $14 million and control over day to day operations.

A representative of 70 of the company’s 250 franchisees delivered a letter to Overs’ office Wednesday with this declaration: “Whereas Lorn Austin’s character is placing in jeopardy the goodwill, reputation and viability of our businesses,

“Be it resolved that Lorn Austin be removed from any position in Pizza Pizza Ltd. immediately as he has completely forfeited our confidence.”

But Overs seems to have no plans to part company with his right-hand man and friend of 20 years.

New marketing plan for Pizza Pizza unveiled
Yesterday, Austin unveiled a new marketing and promotional plan for Pizza Pizza before an audience of 12 franchisees who make up the firm’s new advertising council.

A grinning Austin tapped his feet, rocked back and forth and sang along to a new 967-11-11 jingle planned for radio ads. When they broke for lunch, smiling Pizza Pizza delivery men brought a stack of pizzas for people attending the meeting.

Austin refused repeated requests for an interview. He smiled broadly and said nothing when asked to comment yesterday.

When asked about the demands for Austin’s firing, company spokesperson Stanley White said Overs is “speaking to franchisees individually and responding to their concerns.”

White, newly hired vice-president of marketing, said Pizza Pizza has prepared a new franchise agreement that it is asking all 250 franchisees to sign.

White said the new agreement will make changes to the way franchisees pay for rent and advertising expenses.

“We are looking at how we spend our money, and how effectively on our franchisees’ behalf,” White said.

In response to questions about the demand for Austin’s ousting, White said: “He’s only one of a number of people in the management team.”

A three-month Toronto Star investigation revealed that Austin, who is on parole for masterminding a $4 million gem and credit card fraud in Florida, has been calling most of the shots at the fast-food chain since his release from prison in 1989.

The 43-year-old, Toronto-born Austin was called one of Florida’s most prolific white-collar criminals when he was imprisoned in 1986. He was earlier convicted of fraud in 1977 in Toronto.

The Star investigation also revealed examples of shoddy bookkeeping and widespread mismanagement at the chain, which averages $125 million in sales but appears to be in financial trouble, according to company records and statements by Pizza Pizza executives.

A group of 34 franchisees has sued Pizza Pizza asking the company to open its books and show how more than $14 million in advertising and rent monies pooled in trust accounts has been spent over the past five years.

Those 34 franchisees joined another 36 franchisees at a Mississauga hotel Tuesday to plan a strategy for having their concerns heard. They emerged with the demand for Austin’s removal.

“There’s no room for Lorn Austin in this company,” said Orillia franchise owner Dave Michael, one of the group’s spokespersons.

Lawyer John Sotos, who represents the 34 franchisees, said his clients are “shocked and embarrassed” by the revelations in The Star.

“They are appalled that they were put in a position of being in partnership in a business that was run in large part by a convicted fraud artist,” Sotos said.

If the company doesn’t respond by firing Austin, franchisees plan to march on the company’s Jarvis St. headquarters at noon Monday. They are asking all franchisees and striking phone room workers to attend.

Both Overs and Austin refused requests by The Star to be interviewed before the articles were published last weekend.

After the stories were printed, Austin sent his response through the company-wide order system.

“I want to take a moment to express to you my personal and heartfelt apology for any difficulties you may have experienced as a result of the malicious allegations in the Toronto Star,” Austin’s internal memo reads.

“I know from the heartache that this has brought to my own family that it can be very hard to deal with in spite of the fact that may of The Star’s allegations are false and deal with issues from 10 years ago or more.

Went personally bankrupt for second time last August
The Star’s research showed that Austin went personally bankrupt for the second time in his life last August, owing Revenue Canada $1.3 million and a Toronto lawyer $2.5 million.

During his bankruptcy examination, Austin stated under oath he had not been bankrupt before, and not owned any companies since 1984 and was not starting work at Pizza Pizza until January of this year.

Records obtained by The Star show Austin was bankrupt in 1973, has been part owner of several companies since being released from prison in 1989 and has worked at Pizza Pizza since late 1989.

It is an offence to make a false statement to the federal government during bankruptcy proceedings.

Though bankrupt, Austin pays $9,000 a month rent for this North York home, drives several expensive cars and pays $750 a month for telephone and cable according to his own statement.

Austin’s missive to franchisees concluded: “Ours is a strong, successful organization which has always relied on the energy and commitment of all of our people and I am confident that this sense of teamwork and corporate spirit will stand us in good stead over the next few weeks.”

Overs’ only public response to the stories was a news release dated May 3. He announced plans to launch a libel suit against The Star and said the allegations made in the stories were “blatantly false and irresponsible and cannot stand unchallenged.”


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