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News Briefs

By ALM Staff | Law Journal Newsletters |
June 27, 2005

Prospective Quizno's Franchisees Sue for Deceptive Practices

At least 24 prospective New Jersey Quizno's franchisees have filed a lawsuit in Superior Court of New Jersey, Middlesex County, alleging “deceptive recruitment practices” and “failure to deal in good faith.” The franchisees charge that Quizno's accepted their franchise fees as long ago as 3 years, but have not provided locations for them to open restaurants. According to their attorney, Justin M. Klein, Marks & Associates, Esqs. (Red Bank, NJ), Quizno's has refused to return any portion of the franchise fees, and the company is now threatening those franchisees with termination.

“Quizno's rode the high tide of franchising … and is using people who were looking to get ahead in life and own their own business,” Klein told FBLA. “My perspective is that Quizno's wanted to be able to promote itself as a fast-growing franchise, so it sold franchises without regard to whether a franchisee actually could open a site in the territory it was given.” Klein speculated that Quizno's difficulties have arisen from a misjudgment of its ability to compete with popular fast-casual restaurants like Panera Bread Bakery, rather than quick-service restaurants like Subway and Blimpie's.

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