De-Branded Holiday Inn Franchisee Sues Whiny Little Tattletales. Allegedly.

Franchise Pick Diss-claimer:  The author wishes to make it clear that neither this post, previous posts nor future posts should be construed as criticism or negative commentary upon former Holiday Inn franchisee Kronos Hotels, LLC., its owner Charles Morais, or their law firm. 

In fact, we believe that Kronos Hotels and Mr. Morais are an inspirational testament to perseverance in the face of adversity.  zipit2

Despite the fact that Kronos Hotels (allegedly) could not afford to pay its employees, (allegedly) could not afford to keep its lights on, (allegedly) could not afford to refrigerate the food it served to the public, (allegedly) could not keep its liquor license current despite continuing to sell alcohol, and (allegedly) could not maintain the minimum standards needed to keep its Lancaster, PA property part of the Holiday Inn franchise chain, it was able to muster the funds for the really important things… like suing the whiny little whistleblowing tattletale ex-employees for saying not-nice things about them on the Internet. 

It’s really an outrage that a few bad apples (like the publishers of can damage the pristine corporate image that Kronos has worked so hard to build and maintain.

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Back in October, we reported the fall of the iconic PA Dutch Holiday Inn in Lancaster, PA, a particular favorite spot due to this author’s fascination with roadside statues of giant Amish couples (see  WORDLESS WEDNESDAY: Save the Amish (Sign)!).  We reported how Holiday Inn had banished the property from its franchise chain due to little things like a restaurant closed due to health code violations, selling liquor without a license, and the annoying habit of not paying, well, just about everyone.  Allegedly.  (October 7th, 2008  HOLIDAY INN: Defranchising a PA Dutch Country Icon;  October 8th, 2008  HOLIDAY INN: Franchisors Must Protect Their Brands)

Well, it turns out the same thing (allegedly allegedly allegedly) was happening at other Kronos properties across the country.  In October, we wrote about the website established by former Kronos manager Tom Showalter to highlight the company’s negative press ( October 12th, 2008  HOLIDAY INN: Protest Site Targets Franchisee Kronos Hotels).  According to Lancaster Online, the site was not pleasing to those it featured:

Tom Showalter, of Lancaster, was named as a defendant in a lawsuit filed in Cobb County, Ga., by attorney Matthew M. Wilkins on behalf of Kronos Hotels LLC and its principals, Malaysian entrepreneurs Rajesh Mir and Charles Morais.
The Greenfield Road hotel was one of 16 in eight states Kronos acquired from Lodgian Inc. for $64.9 million in June 2007.
According to Showalter, problems (including paychecks that bounced, a restaurant closed for health violations, investigations into unlicensed alcohol sales, utility shutoffs and vendor services terminated for nonpayment of bills) began overwhelming the hotel soon after the Kronos takeover.
Showalter, who served as interim general manager during the transition from Lodgian to Kronos, began filing complaints with Kronos corporate officials in Georgia and was subsequently fired.

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The lawsuit accuses Showalter of, among other things, libel, fraud, assault, intentional infliction of emotional distress and slander.
It seeks punitive damages in excess of $250,000.

Showalter said he is in the process of filing an answer denying all allegations listed in the lawsuit. He said he cannot afford legal representation.
Unemployed since his termination in December 2007, Showalter has been attempting to get back into the hospitality industry but believes his involvement in the Greenfield Road situation has made it hard for him to find work.
“After 18 years [in the business] it all came to a screeching halt when this happened,” he said.
To Showalter, the lawsuit involves “a classic case of First Amendment rights.” He noted, for example, that all the articles linked to his Web site were attributed to the original authors.
“I wrote no articles at all,” he said.
As for the assault charge, Showalter said, “I have no clue where that came from.

Don’t let the naysayers get you down, Charles!

Despite what the Negative Nellies over at say, Kronos Hotels LLC and its principals, Malaysian owners Rajesh Mir and Charles Morais show real promise of building an American success story.  While it appears they don’t grasp some fundamental concepts, such as freedom of speech and how to operate hotels, they have mastered one uniquely American skill:  The Art of the Frivolous Lawsuit.





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