Dream Dinners, Attorneys Sued for Illegal Earnings Claims, Violation of Washington Franchise Act
By adding pages to the audited financial statements during a PowerPoint presentation, the franchisor showed revenues and expenses purportedly produced by two company-owned facilities. But at that time, the firm and its attorneys did not provide the prospective franchise owners with the Uniform Franchise Offering Circular (UFOC) as required by the Washington State Investment Protection Act.
Later that month the Turners were given the UFOC containing an Item 19 earnings claims provision that discounted any such claim, declaring, "Dream Dinners does not furnish or authorize its salespersons to furnish any oral or written information concerning the actual or potential sales, costs, income or profits of a franchise. Actual results vary from unit to unit and Dream Dinners, Inc. cannot estimate the results of any particular franchise."
Although the franchisees did not enter into a franchise agreement until April 6, 2005, Dream Dinners required them to sign a binding contract as a pre-condition to receiving any further information regarding its franchise opportunity, and specifically before receiving the UFOC disclosure documents. The state of Washington requires in law that a UFOC be delivered and signed 14 days before any contract is signed. At the time they executed their agreement, they paid an initial franchise fee of $30,000 and a "grand opening fee" of $5,000. The contract stated, "This agreement and all transactions contemplated by this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Washington."
Dream Dinners' Misrepresentations
At the time of presenting its franchise opportunity to the Turners, Dream Dinners showed that it had a well-developed and tested "system," including uniform standards and procedures. But what the Turners discovered after investing in the franchise was that the company was in early development stages, far from being proven. The franchisor promised such things as assistance with site selection, lease negotiation, training, advertising, marketing, pre-opening inspections, and promotional methods and materials. But it failed to deliver. According to the complaint, Dream Dinners did not have the infrastructure and experienced personnel to perform on those promises, which constituted material breaches of its franchise agreement.
The franchisor's offer of the franchise originated in the State of Washington and the franchisees accepted it in the State of Ohio. The amendment states that Dream Dinners also violated the Ohio Business Opportunity Purchasers Protection Act, and that it did not qualify for an exemption from the Ohio Act.
Actions and Omissions by Counsel Shows Unlawful Actions
Named in the amended complaint are three attorneys who acted as outside counsel to Dream Dinners--John A. Bender, Joanie Y. Kim and Kevin J. Collette. In addition to naming Holland & Knight, it also names the law firm of Ryan Swanson & Cleveland. Bender, licensed in Washington, was retained by the company as its franchise counsel because of his experience in franchise law. He originally was with law firm Holland & Knight but moved over to Ryan Swanson in 2004, when Kim took over his duties. Collette was employed by the Ryan firm in representing Dream Dinners.
Bender drafted or approved the franchisor's franchise agreement, UFOC and all other contracts and documents used by Dream Dinners in offering and selling the franchise to the Turners. He also approved the procedure used by which they required the franchisees to sign a binding contract before they could receive the UFOC or other information, as well as the PowerPoint slides used to give the earnings claims. He allegedly participated in the illegal earnings claims with Dream Dinners and its accountant, disguising them as being part of the audited financial statements.
The lawsuit also claims that Bender knew or should have known that prospective franchisees were receiving materially false, incomplete and misleading information regarding the franchise opportunity, and that he was a "person in act of control of the activities" of the franchisor. Attorneys Collette and Kim assisted Bender in his activities for the franchise company and did nothing to prevent the relevant violations of the Washington Franchise Investment Protection Act on Dream Dinners behalf.
The complaint states that franchisees Nicole and Eric Turner suffered damages in an amount not yet fully determined but which are estimated to exceed $300,000. For judgment against Dream Dinners and its legal counsel, other attorneys and the law firms, it asks for exemplary damages up to three times actual damages as permitted by the Washington Act, and for costs and reasonable attorney fees.
Dream Dinners has not yet responded to pertinent questions regarding issues addressed in this article sent by email. When they do, Blue MauMau will publish their answers.
Another franchisee lawsuit originally filed in New York state court earlier this year represents approximately fifteen Dream Dinners franchisees. Blue MauMau has learned that an amended complaint will be filed shortly for that lawsuit.
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Related reading
- Dream Dinners Responds to Latest Litigation
- Taking On Restaurants And Grocers - Forbes.com
- Dream Dinners hit with $30 million lawsuit Meal Assembly Watch
- Meal Prep Disassembly
| Attachment | Size |
|---|---|
| FIRST AMENDED COMPLAINT AS FILED.PDF | 1.73 MB |
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the scoundrel that is it a wonder anyone will do business with a heavy breathing God mumbler anymore. Jesus doesn't sell franchises - although you could make a great argument that organized religion is the original model for franchising - starting with Moses giving out territiries to his brothers - the Catholic Church setting up diocesan territories with royalty submissions upstream being required and covenants not to compete - all violated by the Protestant Reformation that was the model for all breakaway franchises cases to follow.--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
The Vatican was remiss in not having a solid non-compete when they brought Martin Luther onboard.
Luther's father wanted him to become a lawyer , and he almost became one till he got caught in a thunderstorm in 1505. Even though he did not become a lawyer, professors of civil procedure still cite Luther as the original example of "contumacious" behavior.
Nowadays, when we want to "glorify God" we become a franchisor of TV dinners (like Dream Dinners) or we become serial franchisors of dubious moral fiber (like Jim Amos).
But back in 1505, one glorified God by actually studying, not scamming gullible zees; so Luther entered into the franchisor training course.
Once Luther saw the process from the inside, he became (like those Cuppy's employees) disenchanted and looking for a way out. And although sinners could buy indulgences and escape damnation (kind of like paying-off Steve Horn & Bob Zisk ) the employees were in a bind.
Luther heard about Richard Solomon's discussion of the Dunkin' wife's panties , and Luther decided that if he was ever to see any panties, he would have to break his vow of celibacy, which was a condition of his continued employment.
After consultation with Solomon over many barrels of beer , Luther decided to breach his contract.
Luther disclosed proprietary trade secrets in translating the Operations Manual from Latin to German , and some of his associates decided to join with Luther and set up shop in direct competition without paying royalties to the former franchisor.
Today we have Jim Amos who claims a personal relationship with Jesus, but back in Luther's day the Pope claimed to be the Development Agent for the whole Trinity (!!). So the Pope exercised his dispute resolution clause and forced Luther to travel to a distant forum to resolve his complaint.
Luther had the misfortune to arrive in the forum shortly after the local Quizno's had gone bankrupt, and so all they had was the leftover Quizno's meatballs, which some historians and culinary experts have compared to eating a "diet of worms ."
The Pope had the advantage of being a "repeat player " upon whom the tribunal was dependent for future business (not to mention eternal salvation) and needless to say he won the case. But when he moved for confirmation (no pun intended) of the award in Luther's home jurisdiction, a rather lengthy and violent battle ensued.
Some say that the parties settled while on appeal by agreeing "cuius regio eius religio " in 1555.
But a better view is that the Pope only achieved a partial confirmation of the arbitral award with a treaty leading to the Peace of Westphalia , which "split the baby" but excluded the Jews because they wouldn't eat in the court cafeteria since it served Westphalian ham for lunch, and so the Jews annoyed both the Papist and the Protestant factions.
Being from Texas, the Dream Dinners folks are no doubt aware that their fellow Texan GW Bush's contempt for Westphalian sovereignty is the source of much current distress, but that is a story for another day.
Moral of the Reformation is to always have a properly-drafted employment contract (especially when hiring someone trained as a lawyer) and not to hold grudges against pork.
Paul Steinberg
Franchisee Attorney, New York City, Ph: 212-529-5400
Paul Steinberg, Franchisee Attorney, New York City, Ph: 212-529-5400
Over a dozen meal prep victims have called me. None has money to pay for representation. They're all broke. Unfortunately, the franchisors are apparently judgment proof, so it's not likely anyone will represent them on a contingent fee.
And ti think that they could all have avoided the losses for about $ 3,500 a piece had they only hired me to help them vet the deal before they bet the farm.
FranWads never learn! You don't have to lose everything you have in the world on stupid investments if you get the right representation before you sign on to the scam.--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Hey, who you kiddin'?
I watched the video about Martin Luther's diet of worms. First, that ain't Martin Luther. That's young Will Shakespeare with a really bad haircut.
Second, I don't see any worms being eaten.
Pay attention!--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
nonetheless. As a baker of hosts for various churches that my wives belonged to, I know that any kind of yummie bread is much preferred to the "wafer". Many high church Episcopalians received the "host" in the form of my rosemary and prosciutto foccacia.--
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
Richard Solomon, FranchiseRemedies.com, has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School
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