Quiznos toasts court win

Federal judge tosses franchisee lawsuit in Illinois

By Joyzelle Davis, Rocky Mountain News (Contact)

Published April 3, 2008 at 12:05 a.m.

Text size

More Retail

A federal judge this week dismissed a lawsuit filed against Quiznos by franchisees in Illinois, the latest court victory for the toasted-sandwich shop operator.

U.S. District Judge Rebecca Pallmeyer tossed the six franchisees' federal fraud and antitrust claims but said they can try again in state court.

The outcome is similar to a federal judge's ruling in Wisconsin late last year and follows a Canadian judge's dismissal of another lawsuit last month.

"In light of the explicit and comprehensive disclosures" in Quiznos' franchise agreement, "plaintiffs cannot sustain any claim predicated on the contractual terms in question," Pallmeyer wrote in her 18-page order dated Monday.

Quiznos has been battling franchisee lawsuits across the country for more than a year. Many of the suits allege that franchisees were forced to pay inflated prices for supplies from Quiznos or its approved vendors and that the Denver-based company misrepresented the costs of running a store.

Quiznos counters that the contracts received by every franchisee before signing the agreement disclosed its relationship with suppliers as well as an acknowledgement of the business risks.

Former Burger King CEO Greg Brenneman took the helm of the 5,200-restaurant company last year and quickly began attempts to mend relations with franchisees and introduce new, more profitable menu items like the Sammies $2 flatbread sandwiches.

In the past year, Quiznos has cut the number of lawsuits against the company nearly in half, to 28, either through dismissals or settlements, said Richard Emmett, Quiznos' chief legal officer.

"We are glad to have (the Illinois) litigation behind us so we can focus our time, energy and expense on something much more important to our business, and that is improving our franchise profitability," Emmett said.

Justin Klein, a lawyer who represents the Quiznos franchisees, said Quiznos still has plenty of court cases on its docket. Klein said he's refiled the Wisconsin suit in state court and plans to do the same in Illinois. Franchisees also have filed two separate class-action suits in Colorado, which are in the early stages.

"These cases are far from over," he said. "We will continue to pursue them until our franchises have the opportunity to fairly present their cases."

davisj@RockyMountainNews.com or 303-954-2514

Subscribe to the Rocky Mountain News