Notorious franchiser suing Oxford

Investors and lawyers have contacted the Toronto Star in the past month saying they or their clients have paid nearly $900,000 since last fall for eight Pizza One or Anthony's Kitchen franchises. Buyers would like their money back, but none has filed a lawsuit.

The Toronto Star
April 15, 2006

Notorious franchiser suing Oxford
Solhi demands prime leases. Property giant says it was misled.
James Daw

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Oxford Properties Group, an arm of the pension plan for Ontario's police officers and municipal employees, is in the midst of a legal dispute with Ontario's most controversial franchising family.

The major landlord offered last November to lease prime space for a new chain of restaurants to be called Anthony's Pizza Uno, and later Anthony's Kitchen. Then executives discovered the proposed tenant did not yet exist.

Executives thought the owner was from a family with a lot of capital to build and operate several restaurants.

Instead, the owner was Reza Solhi, the much-sued and indebted founder of the defunct 3 for 1 Pizza & Wings (Canada) Inc. chain. Solhi now runs Thornhill companies registered in the name of his mother, Ashraf (Ashley) Mirkhan.

One of those companies, Anthony's Pizza Uno Holdings Ltd., has sued Oxford and associated companies for $10 million, claiming they have compromised expansion plans by "wrongfully and without just cause" reneging on leases offers.

Anthony's is seeking a court order to obtain space in the six Oxford-related malls, and an injunction to bar the landlords from leasing the space to other tenants. A motion hearing is set for next Friday.

Solhi, who now uses Anthony as his first name, has sworn an affidavit filed in court on behalf of the company. He says he was hired as a consultant to assist with its expansion, and he attended a meeting to start discussions with Oxford last October.

Solhi claims that offers to lease were extended after a later meeting he did not attend, when several Oxford executives were given two bottles of wine each and "VIP cards" for free food from the proposed restaurants for two years, worth up to $4,000 per card.

Locations at Yorkdale Shopping Centre, Scarborough Town Centre and Square One Shopping Centre in Mississauga, plus three others, would have added to Anthony's reputation and business, he contends.

"The plaintiff has already obtained commitments for franchisees to operate franchises at all the locations," he adds. "The plaintiff has told numerous prospective franchisees in Canada, the United States and abroad about these locations. We have been informed by numerous people that they will proceed to purchase our franchise once these locations are under construction or opened.

"The reputation of the sales staff and the plaintiff would be irreparably harmed if these locations were not secured."

But Bradley Jones, vice-president of leasing for Oxford Retail Group, contends he was misled about the new franchise chain and the people behind it. He claims Solhi was introduced to him as Anthony Mirkhan, owner of Anthony's.

"I now believe he is also known as Ashraf Mirkhan, Reza Solhi and Anthony Solhi," Jones states in an affidavit sworn March 13 and filed in court. In the affidavit, he acknowledges executives did receive the wine and meal coupons, and that offers were made to lease three locations, while preliminary proposals were made for three others.

But Jones wrote to Solhi on Feb. 8 (addressing him as Ashraf Mirkhan) to say that agreements for Yorkdale, Square One and Scarborough Town Centre were nullified because the proposed tenant did not exist at the time.

A hot prospect to pay $500,000 for a new Anthony's Kitchen restaurant at Yorkdale says she was told in March that space was available, at $264,000 a year. Real estate agent Marny Motamedi says Anthony's representatives told her nothing about any trouble over the leases. She says she asked, but did not get to meet the owner, Ashraf Mirkhan, who is also sole director of Anthony's Pizza Uno Inc., Anthony's Kitchen Inc. and Pizza One Group Inc. of Thornhill.

While Motamedi also did not meet Solhi, she says she met at Yorkdale with two sales representatives of Anthony's Kitchen on March 12: "They specified they (the company) signed a lease and everything was ready to go," she says.

Two days later, she read in the Toronto Star that Oxford had denied there was any lease or construction, and that Solhi was involved. The story referred to lawsuits, court orders, unpaid debts and complaints to police that are hanging over promoters of the new franchise. Motamedi says she knew of the Solhi name and reputation from others in Canada's Iranian community.

"Why would I go into a half-million-dollar investment with people who don't have a good reputation?" she says. She decided not to buy the franchise before signing any documents or paying any money.

One judge has compared Solhi's business practices to piracy on the high seas, while another called Solhi deliberately dishonest. Last October, Solhi avoided prosecution on 25 charges of fraud in connection with franchise sales when he and an associate agreed with the Crown to repay $530,000 to 22 complainants.

Some $800,000 in mortgages were added to Solhi's home before the deal was struck. Meanwhile, his mother worked at Pizza One shops in Hamilton and Toronto. In September, she denied knowing about a particular lawsuit or head-office affairs.

Solhi, his associate Farzad (Fabio) Bagherzadeh, their companies and those of his family owe about $1.27 million in unpaid civil awards, plus legal costs and interest. Police in York Region say they have received complaints from a new group of franchise buyers from as far away as Montreal, Winnipeg and Regina.

Investors and lawyers have contacted the Toronto Star in the past month saying they or their clients have paid nearly $900,000 since last fall for eight Pizza One or Anthony's Kitchen franchises. Buyers would like their money back, but none has filed a lawsuit.

Yet, it's Oxford that Solhi blames for compromising his family's ambitious expansion plans: "Millions of dollars in commitments will be in jeopardy if these locations are lost," he states in an affidavit filed in court.

Solhi denies in affidavits filed in court that Oxford's Jones was misled about Solhi's identity, or the ownership and legal status of Anthony's. He points out that a different company, Anthony's Pizza Uno Inc., was incorporated before the lease offers were extended.

In an email message filed in court, Solhi claims he has videos, audio tapes and email messages that make clear Jones knew about Anthony's corporate status and the outstanding litigation. In another message, Solhi asserts Anthony's right to leases, and demands a meeting with Jones.

A new crop of Anthony's executives met with Oxford officials Feb. 9 to assert the lease agreements were valid and binding. One of the executives noted in an affidavit that a security guard was posted at the door to bar Solhi, who did not attend because he was distraught.

Jones insists in his affidavit that leases were void because Anthony's did not exist at the time documents were signed. But an email message from Jones filed in court suggests that Oxford was also worried about "a significant amount of litigation proceedings" involving Mirkhan and companies or persons related to her.

Jones states that he was introduced to Solhi by Michael Lublin, a man Jones had known for about 10 years at other franchise companies. Lublin started working with Solhi late last summer, then quit suddenly around Jan. 27. A few days later, Oxford withdrew its lease offers.

Jones is not the first to claim he was misled about Solhi. Among the prospective franchisees who have sued Pizza One and members of Solhi's family to recover more than $500,000, some protest they were not told about Solhi's background.

These plaintiffs allege Solhi called himself Anthony, and signed contracts using his mother's initials and maiden name. The plaintiffs are claiming refunds on the grounds of not being given key information required under Ontario franchise law.

Anthony's Kitchen advertised on the Internet April 6 about seeking directors of sales for Florida and Texas, at $100,000 (U.S.) a year. Since Feb. 24, the company has advertised for an executive chef, junior lawyer, receptionist and director of sales for Canada.

A website promoting Anthony's Kitchen continues to claim that six restaurants will open in malls related to Oxford by late spring or summer.


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