QUIZNOS: Quiznos Franchisees Celebrate Legal Victory

When the ball dropped and America yelled Happy New Year! last night, Quiznos franchisees Ellen Blickman and Rich Piotrowski were giddy on more than champagne. They had just received, hours earlier, the judge’s ruling that ended their two year battle with franchisor Quiznos Franchising II, LLC. They had just read District Court Judge Morris B. Hoffman’s 36-page ruling that, effectively, gave them their lives back.

If you have not followed previous Quiznos vs. Quiznos franchisee stories, the husband-and-wife’s story of legal persecution at the hands of the corporate giant sounds both preposterous and exaggerated. How could (and why would?)  a well-known company immediately terminate a compliant franchisee, rob them of their livelihood for (supposedly) improperly making a single sandwich on one, isolated occasion? Who would believe that a corporate attorney could commence litigation against them because he didn’t like the voice mail message left by a frustrated franchise owner whose previous 20 urgent calls had gone unreturned? As implausible as it sounds, the judge found that’s exactly what occured. The ruling states:

Defendant Zig Zag Restaurant Group, LLC (“Zig Zag”) is a Pennsylvania limited liability company formed by the individual Defendants, Richard Piotrowski and Ellen Blickman. Piotrowski and Blickman, who are husband and wife, are the only members of Zig Zag, which they formed for the purpose of owning and operating a Quiznos franchise…

As discussed in more detail below, Defendants entered into two franchise agreements with Quiznos, but ended up operating only a single store, in Coopersburg, Pennsylvania. They operated the Coopersburg store for only eight months, at the end of which their franchise agreement was purportedly terminated by Quiznos because Quiznos allegedly determined Defendants had intentionally under-portioned the meat on a single sandwich. Quiznos brought this action claiming, among other things, that Defendants breached both franchise agreements, and Defendants counterclaimed for breach of the Coopersburg agreement and rescission of the unused agreement.

As the result of a five-day bench trial in early December, 2008, the judge dismissed Quiznos charges and ruled in favor of the Defendants:

I conclude that Defendants have proved their entitlement to rescissional-type damages as a remedy for Quiznos’ wrongful termination of the 6309 Agreement, and that the proper amount of 30 those damages is $349,797.00, plus costs, fees, and post-judgment interest at the contract rate of 24%.

Of course, this is much more of a moral victory than a financial one – since the franchisees have debt and obligations that will eat up the damage award.

Of course, there is much more to this story – which I will explore in future posts.

I’ll conclude with both thanks and congratulations to Rich & Ellen:  Congrats on your win, and thanks for a great David & Goliath story.  What a great way to start the new year!

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