BBQ chain sues franchisee

…alleges that the couple, who have had the Triangle's Red Hot & Blue franchise for 10 years, began missing payments in September 2002…Red Hot & Blue has asked a federal judge to order Groot and Sparks to sell back the three franchise restaurants for $1.8 million…under the franchise agreement, the parent company terminated its contract earlier this year and has the right to buy back the restaurants. “We're not bringing this because of the money…

www.newsobserver.com
May 21, 2004

BBQ chain sues franchisee
Sam LaGrione, Staff Writer

Red Hot & Blue, a barbecue restaurant chain, has filed a lawsuit in U.S. District Court to force its decade-old Triangle franchise to sell back three restaurants to the company for violating franchise agreements.

The Arlington, Va., chain alleges that James Groot, his wife, Robin Sparks, and their corporation, Carolina Blue Enterprises, owe the parent company monthly royalties, advertising fees and loan installments totalling nearly $200,000.

The suit, filed in April in Alexandria, Va., alleges that the couple, who have had the Triangle's Red Hot & Blue franchise for 10 years, began missing payments in September 2002. They run one restaurant each in Cary, Raleigh and Chapel Hill.

Red Hot & Blue has asked a federal judge to order Groot and Sparks to sell back the three franchise restaurants for $1.8 million. A hearing is scheduled for today in Alexandria, although Groot's lawyer has requested a delay.

Groot said he wasn't aware of the lawsuit's specifics. He did not answer any questions about the dispute and would not speculate on a possible outcome.

"You ask me the best temperature for cooking ribs, I've got answers for that," said Groot, who is also known by his nickname, "Jimmy Rib."

Groot's lawyer, Ron Dorrestein of Chapel Hill, said he was reviewing the suit and considering counter-claims against Red Hot & Blue. He would not comment further.

A lawyer for Red Hot & Blue said that under the franchise agreement, the parent company terminated its contract earlier this year and has the right to buy back the restaurants.

"We're not bringing this because of the money," said Barry Heller, who represents Red Hot & Blue. "The bottom line is we filed it because we're concerned that guests do receive the great quality service that they expect at a Red Hot & Blue."

In a court filing, Red Hot & Blue alleges that the three restaurants run by Groot and Sparks "are offering unapproved menu items to customers using an unapproved menu, with a misuse of the RH&B logo, which is causing irreparable damage to the RH&B brand and trademarks."

In March, Red Hot & Blue sent a letter terminating the franchise agreement after several warnings to pay the money it alleges Carolina Blue owes. Since then, the suit alleges that Groot and Spark's lawyer has purposely avoided contact with Red Hot & Blue's lawyers.

Red Hot & Blue was founded by former Tennessee Gov. Don Sundquist and a group of friends in 1988. The company has about 40 franchises in 10 states. The restaurants serve Memphis pit barbecue cuisine.

Groot said he was dubbed "Jimmy Rib" when a young girl confused customers' requests for "Jimmy's ribs," with Groot's name. It stuck. Groot said he learned about barbecue during a stint in the military in Texas.

Staff writer Sam LaGrone can be reached at 829-8968 or moc.revresboswen|enorgals#moc.revresboswen|enorgals.


Brought to you by WikidFranchise.org

Risks: Franchisor has right to buy outlet before anyone else, It's not about the money, Opportunism (self-interest with deceit), Termination of franchisee, single, United States, 20040521 BBQ chain

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License