Franchisee AKL Food Service Sues Tony Luke's for Fraud

…grossly understating start-up and operational costs, artificially inflating sales projections and making unlawful earnings claims. The complaint further alleges that the defendants failed to provide AKL with the mandatory Federal Disclosure Document required by the Federal Trade Commission in connection with the sale of any franchise opportunity.

http://news.prnewswire.com
April 15, 2009

Franchisee AKL Food Service Sues Tony Luke's for Fraud
News Release
Paris Ackerman & Schmierer, LLP

ROSELAND, N.J., April 15 /PRNewswire/ — On Monday, AKL Food Service, LLC filed suit against Tony Luke, Inc. and other entities and individuals in the Monmouth County Superior Court of New Jersey, alleging that the defendants improperly represented a Tony Luke's franchise opportunity.

Tony Luke's is a popular Philadelphia cheese steak restaurant chain, with company-owned locations in Citizen's Bank Ball Park, home to the Philadelphia Phillies, downtown Philadelphia and Atlantic City's Borgata Hotel & Casino.

According to the complaint, in 2005, Tony Luke's induced AKL's managing member, Anastasios Linardos, into purchasing the rights to open and operate New Jersey's first Tony Luke's franchises by grossly understating start-up and operational costs, artificially inflating sales projections and making unlawful earnings claims. The complaint further alleges that the defendants failed to provide AKL with the mandatory Federal Disclosure Document required by the Federal Trade Commission in connection with the sale of any franchise opportunity.

"By failing to provide AKL with a Federal Disclosure Document, the defendants flat out failed to comply with one of the most fundamental tenets of franchising," said David Paris, of Paris Ackerman & Schmierer, LLP, attorneys for AKL. "The failure to provide my client with the requisite disclosure document was not only irresponsible, but is considered to be a deceptive act in the eyes of the FTC. The failure to properly disclose AKL was exacerbated by the misrepresentations defendants made regarding the Tony Luke's franchise opportunity."

The complaint alleges that as a result of defendants' misconduct AKL has lost at least $9,000 per month in the past two years. Ultimately, these significant monetary losses forestalled further expansion and are forcing AKL to close its Tony Luke's franchised restaurant. The complaint charges Tony Luke, Inc., TRP Management LLC, TL Enterprises, LLC, Rastelli Foods Group, TR Franchise, LLC, Anthony Lucidonio, Sr., Anthony Lucidonio, Jr., Antony Lucidonio, III, Ray Rastelli, and Bill Pizzico, with wrongdoing against AKL.

About AKL Food Service, LLC
AKL is a New Jersey limited liability company based in Monmouth County, New Jersey. AKL was formed by Anastasios Linardos, and two other individuals who are no longer members of the entity. AKL was formed for the purpose of owning, operating and developing certain Tony Luke's franchised restaurants.

SOURCE Paris Ackerman & Schmierer, LLP

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Risks: Celebrity endorsement, Deceptive business practices, Designed to fail as franchise investment, Disclosure documents never given, False earnings claims, Fraud, Misrepresentations, Uniform Franchise Offering Circular, UFOC (FDD), United States, 20090415 Franchisee AKL

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