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BOCA RATON – A south Florida franchise owner is suing The Original Brooklyn Water Bagel Company and its principals for tricking him into believing the company was based on a “patented” water purification process.
Florida Bagels LLC, Arsenal Holdings LLC and Egg Ventures LLC filed the lawsuit in Palm Beach County Circuit Court through the law firm of Zarco, Einhorn, Salkowski & Brito, PA. The amended complaint names not only the company and its franchise entity, Brooklyn Bagel Franchise Co., Inc., but also the founder Steven Fassberg, president Scott Harris and CEO Ira Marcus. They are seeking damages over $2 million, plus treble the amount of punitive damages, attorney fees and costs.
The lawsuit claims that South Florida trial attorney Fassberg and former general counsel of the franchise company Marcus knew that the water processing system should not be patented. In the fall of 2007 they sought professional advice and were told the process was commonly used, and there was nothing “novel” about their invention. The franchisee’s legal representatives say the franchisor officers ignored that advice and instead embarked on a false and misleading advertising and marketing campaign. They induced the Florida franchisees to enter into a development agent agreement and tender large sums of money to Brooklyn Water Bagel Co., the lawsuit states.
“This allegedly exclusive, patented 14-stage water purification and treatment process used to replicate Brooklyn, New York water anywhere in the world was a ruse used to deliberately, intentionally, knowingly and willfully trick prospective franchisees into making outrageous financial investments in the company,” said Robert Zarco, lead attorney in the case. He said the company principals boast, “It’s all about the water.”
In a 2010 Franchise Times interview, spokesperson for The Original Water Bagel Co. Larry King said, “I always check out products I endorse.” The CNN celebrity declared he would never promote anything that he didn’t believe in.
King, now retired from the television network, has also signed on to conduct franchise development for the company in Southern California.
Zarco and partner Himanshu M. Patel state that former CNN host Larry King, joining the company in 2010, as its national spokesperson, is currently being investigated. They will determine whether, and to what extent, King played a role in carrying out the company’s “false, misleading and fraudulent advertising and marketing strategy” in print, radio and Internet promotions.
The lawsuit further alleges that Brooklyn Water Bagel Co. is currently continuing to represent it has rights to a “proprietary” 14-stage water purification treatment process.
Significance in the case
Zarco said this case should raise eyebrows of every prospective franchisee who looks to invest in a franchise. “Any investor should make sure that the technology or product or service that is being touted as unique and distinctive, is in fact what the company represents it to be.” He said investors should also make sure they carry out due diligence to ascertain whether it is patented or not. “If you are investing in a product that serves a particular function, make sure you confirm the product will do what they say it can do,” adding, “Investigate and verify.”
Another significant part of the case: “Just because a prominent spokesperson is hired to promote a product, do not assume that person has vetted, to confirm or reaffirm that the product in fact is worthy of that endorsement,” Zarco warned. “Don’t let a celebrity spokesperson create a false sense of security to imply that the product has been vetted and certified to be what the company claims it to be,” he added.
Zarco points out that the Kardashian sisters just were sued. They were spokespersons for a weight loss company in New York. Zarco says, “Based on representations made by them, which perhaps were reckless without doing any investigation, people are now suing them based on reliance.”
Law partner Patel reinforced Zarco’s position saying, “How can a franchisor go out there recklessly, with the assistance of its general counsel, and state that there is a patented 14-stage stage water purification and treatment process used to replicate Brooklyn water when in fact is not patented.”
Original Brooklyn Water Bagel Co. counsel says claims are false
Miami attorney Robert M. Mayer, who represents the Original Brooklyn Water Bagel Co., said the lawsuit is unfounded and the allegations are untrue.
“The plaintiffs, whom are attorneys and sophisticated business people in other ventures, were just not successful in this business and are seeking to blame someone else,” Mayer said in an emailed statement. “Brooklyn Water Bagel has a highly successful product and unique concept that is doing well at numerous other locations. The company has won awards for its food and creativity and will continue to deliver quality products to its customers through its growing number of locations around the country. We are confident that once the evidence is presented, these allegations will be dismissed or judgment entered against the plaintiffs."
|Brooklyn Water Bagel First Amended Complaint.pdf||10.97 MB|