DENVER, Colo. — Federal District Judge Wiley Y. Daniel has refused to dismiss any of the claims alleged in a class-action lawsuit filed by several Quiznos franchisees in the U.S. District Court for the District of Colorado, Bonanno, et al. v. The Quiznos Franchise Company LLC, et al.
The decision, issued March 5, states that after considering both sides' legal positions, the franchisees have alleged valid claims for, among other things, violations of the Colorado Consumer Protection Act, breaches of the covenant of good faith and fair dealing, fraud, as well as a declaratory judgment that the franchise agreements signed by the franchisees are "unconscionable."
The class-action lawsuit, which seeks compensatory and punitive damages, alleges that Quiznos unlawfully collected more than $75 million in franchise fees from more than 3,000 franchisees across the United States that never opened a store. Refunds of those fees were not rendered despite Quiznos' failure to provide contractually required site selection services to the franchisees in a timely manner. The suit, originally filed in a New Jersey state court Feb. 16, 2006, is pending in the U.S. District Court for Colorado.
"Quiznos has publicly tried to discredit the claims alleged by franchisees against the company, calling them ‘meritless' and ‘tired.' This decision shows that Quiznos is wrong," said Justin M. Klein, of the law firm Marks & Klein LLP, who represents the plaintiffs along with Joseph S. Goode and Mark M. Leitner of the Milwaukee, Wisc., law firm of Kravit, Hovel & Krawczyk S.C. "We will continue to vigorously represent the franchisees until they are vindicated and the wrongs of the past are rectified."
Quiznos asked the court to dismiss all eight claims filed against the company, but Daniel denied that request on each claim. The court also refused to dismiss any of the claims against Richard E. Schaden and Richard F. Schaden, the majority owners of the corporation. The younger Schaden is implicated directly in the plaintiffs' amended complaint with conduct that the court has said, if proven at a trial, would lead to a finding of liability.
