Quiznos group aims fraud charge at franchisor again

Nation's Restaurant News,  August 27, 2007  

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DENVER -- A group of more than 40 Quiznos Sub franchisees has filed a class-action lawsuit on behalf of the operators of nearly 5,000 domestic franchised branches of the sandwich chain, alleging that the company has systematically defrauded franchisees in order to build the brand.

The suit, filed Aug. 14 in U.S. District Court here, contends that Denver-based Quiznos forces franchisees to purchase food, supplies and other services from the company or its affiliates at inflated prices, while setting artificially low retail prices for its products, making it difficult for franchisees to make a profit.

The suit, whose specific complaints mirror accusations against the franchisor made in previous class-action litigation, also accuses Quiznos of misrepresenting key facts about the stores' operations in order to sell franchises. The plaintiffs are seeking damages for lost investments and a court order that would halt Quiznos' allegedly improper practices.

Quiznos chief legal officer Rich Emmett said he was unimpressed with the substance of the lawsuit and disappointed that the action was filed as the company was focused on improving store operations for franchisees.

"And," he said, "for this plaintiffs attorney to file the same case [as others have filed] again, with a press release portending it to be something fresh and new, is a distraction from everything we and our franchisees are trying to do."

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