California Quiznos franchise battle

The Babers allege in their suit that Quiznos breached its promise not to allow other franchisees to operate restaurants within two miles of the couple's two Los Angeles locations. The couple further contends Quiznos has tried to terminate their franchise agreement in retaliation for the Babers' creating the Quiznos Franchisee Association.

Denver Business Journal
August 31, 2005

California Quiznos franchise battle

A Los Angeles court has ruled that the Quiznos Sub restaurant chain of Colorado can't shut down one of its California franchise operations.

The move relates to a lawsuit filed by Quiznos franchisees Bob and Ratti Baber of California in April against chain owner, The Quizno's Corp. of Denver. The restaurant chain currently goes by the corporate name The Quiznos Master LLC.

The Babers allege in their suit that Quiznos breached its promise not to allow other franchisees to operate restaurants within two miles of the couple's two Los Angeles locations.

The couple further contends Quiznos has tried to terminate their franchise agreement in retaliation for the Babers' creating the Quiznos Franchisee Association. Quiznos has made it more difficult for the Babers to run their restaurants with "incessant inspections" and constantly criticizing them "over relatively minor and insignificant matters," according to the Babers' attorney, Fred Pardes of Los Angeles.

The Babers contend they started the association to compel Quiznos to deal with problems its franchisees have with the Colorado restaurant company, including its failure to support franchisees as promised.

On Aug. 26, Los Angeles Superior Court Judge Joseph DiLoreto denied Quiznos requests for a permanent injunction against the Babers as well as a motion to compel arbitration in Colorado, Pardes said in an Aug. 31 statement. The court ordered arbitration to occur in Los Angeles County, where the Babers' restaurants are located.

Los Angeles Superior Court online records go only to Aug. 18.

The rulings track with the recent trend of courts protecting franchisees' rights against the franchise corporations under which they operate, according to Pardes.

Started in 1981, Quiznos is controlled by CEO Rick Schaden and his father Dick, a Boulder attorney. The company now has more than 4,000 restaurants in 15 countries.

The formerly public company went private in 2001.

© 2005 American City Business Journals Inc.


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Risks: Whistleblowers, Encroachment (too many outlets put in territory), Retaliation, Dissent, No franchisor support, Termination threats, Independent franchisee association, United States, 20050831 California Quiznos

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