3 for 1 Pizza ordered to refund $58,500 deposit

Franchisor 3 for 1 Pizza & Wings (Canada) Inc. used a "fraudulent scheme" to acquire $58,500 from a Barrie couple, a judge has ruled. Mr. Justice Harry Keenan of the Ontario Superior Court of Justice has ordered the company and a related firm, Triple Holdings Ltd., to refund deposits to Tricia and Stephen Scott, plus mortgage fees and interest, for a total of $74,920.68.

The Toronto Star
October 7, 2003

3 for 1 Pizza ordered to refund $58,500 deposit
Franchisor loses court case. ‘Fraudulent scheme’ cited.
James Daw

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Franchisor 3 for 1 Pizza & Wings (Canada) Inc. used a "fraudulent scheme" to acquire $58,500 from a Barrie couple, a judge has ruled.

Mr. Justice Harry Keenan of the Ontario Superior Court of Justice has ordered the company and a related firm, Triple Holdings Ltd., to refund deposits to Tricia and Stephen Scott, plus mortgage fees and interest, for a total of $74,920.68.

The Scotts testified last month that they saw a newspaper advertisement for 3 for 1 franchises in 2001, met with a salesman at the company's Bay St. offices and paid nearly half the price of a new location without receiving one.

Reza Solhi, president of the two companies, testified along with his marketing manager, William Chaupiz, that the salesman was not an employee or agent of Solhi's companies, despite what his business card indicated.

They said the husband and wife were actually dealing with companies of Farzad Bagherzadeh, a franchise owner who manages the chain's telephone call centre.

Bagherzadeh was not called to testify and the Scotts said they had never met him or heard of him.

In his ruling, issued Oct. 2, the judge referred to Bagherzadeh as "the phantom."

Lawyer John Chidley-Hill argued that Solhi's companies had no obligation under the Arthur Wishart Act (Franchise Disclosure) 2000 to provide a package of disclosure documents to the Scotts or to refund their deposits since they had not fulfilled their part of an agreement.

Keenan said he accepted everything the Scotts said and totally rejected the testimony given by Solhi and Chaupiz.

"I find that their evidence that the named defendants (3 for 1 and Triple Holdings) did not have any part to play in this fraudulent scheme is utter nonsense and not worthy of belief whatsoever."

Keenan agreed with lawyer Cary Boswell of Craig Boswell McDermot that the Scotts were entitled to their money back under the Wishart Act. The judge also agreed that promises were breached and it was unconscionable that the Scotts received nothing for their money.


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