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National class-action suit filed against Quiznos
August 14, 2007
DENVER —A class-action lawsuit was filed against Quiznos Sub Aug. 14 in the U.S. District Court for the District of Colorado.
The lawsuit was filed on behalf of a class of an estimated 5,000 Quiznos franchisees across the United States alleging that the franchisor has systematically defrauded its franchisees.
Among other things, the lawsuit contends that the company forces franchisees to buy food, supplies, and services from Quiznos or its affiliates, at drastically inflated prices while concurrently setting artificially low retail prices for its products.
Additionally, the franchisees allege that the company unlawfully participates in a scheme to sell the franchises by omitting or otherwise misrepresenting key facts about Quiznos' business operations.
In seeking damages for lost investments as well as injunctive relief, the suit alleges, among other things, statutory and common law fraud, violations of federal and state antitrust laws, violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act, breach of contract, and violations of Colorado franchise and consumer protection laws.
"The success of this system is dependent upon the success of its franchisees," said Danny Kessels, a Quiznos franchisee in Colorado and president of the Toasted Subs Franchisees Association Inc. (TSFA), the trade group representing Quiznos franchisees that helped organize the class-action suit. "The goal of the lawsuit is to right the wrongs of the past, and to ensure that franchisee profitability will be the focus of this system in the future."
Recently, a class action lawsuit filed on behalf of franchisees alleging that the company had sold franchises it had no ability to open (Bonanno, et al v. The Quiznos Franchise Company, LLC, et al., Civil Docket No. 06-02358) was amended to expand the class to cover franchisees throughout the United States.
Read also, Quiznos, TSFA president settle lawsuit, Quiznosto refund franchisees $2 million, Quiznos responds to Illinois lawsuit and Quiznos franchisees file third class-action lawsuit.
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