Our Results
Exposing Fraud and Recovering Damages
Our clients purchased quick-service restaurant franchises based on average sales information in Item 19. However, after our clients bought their franchises and invested hundreds of thousands of dollars, they discovered that the “average” sales the franchisor had given them weren’t representative of the new stores’ performance. After a lengthy battle, the franchisor settled with our clients for more than $10,000,000.
Our clients purchased tutoring franchises because the franchisor misled them about the cost of operating their business and the prospect of success. After winning an arbitration award of approximately $250,000 plus attorneys' fees and interest for one franchisee, we settled the remaining franchisees’ claims. The franchisor signed over the system to the franchisees.
Defending Termination Claims
Our client was operating a healthcare business without a formal franchise agreement. When the franchisor sued our client for allegedly violating a franchise agreement that the client had never signed, we defended the franchisee, filed aggressive counterclaims, and settled the case before trial. Our client was able to continue operating her business independently.
Defending Trade Secret Claims
After our client separated from its franchise system, the franchisor sued our client to enforce the non-compete agreement and to pursue claims for theft of trade secrets. We successfully defeated the franchisor’s attempt to obtain a temporary restraining order and prevent our client from operating. Our client successfully rebranded and operated independently. After a multi-week jury trial, the court dismissed all the franchisor’s trade secret claims.
Recovery of Investment
Our client purchased a quick-service restaurant franchise, in large part, based on financial performance information provided by the franchisor. On the first day of operations after the “grand opening”, the franchisor tried to terminate the client’s franchise with no notice, explanation, or opportunity to fix whatever the client might have done wrong. Our client retained us immediately, and within four months, including a full-day mediation, we negotiated a settlement where our client received his entire investment back, including attorneys' fees. We were even able to get our client released from the non-compete.