Judge Rules Against Dunkin' Donuts Franchisee in Jury Trial
PROVIDENCE, RI – “We were stunned.” That from Dunkin’ Donuts franchisee Irwin Barkan after receiving a directed verdict by Senior U.S. District Judge Ronald R. Lagueux on Wednesday, the seventh day of his jury trial. Barkan said he was very disappointed that the judge took the decision out of the hands of the jury after all this time. “And he did it without hearing the testimony of a single witness from Dunkin’ defendants. We were right in the middle of the trial when he issued the judgment,” he added.
Barkan has been fighting in court against the franchisor for five years to seek justice in losing his six stores and his store development agreements to open new franchises. He claimed that Dunkin’ intentionally blocked his efforts to refinance his stores through CIT, even though Dunkin’ had agreed to the financial restructuring of his company. Barkan asserts that Dunkin’s interference of the refinancing process forced him into bankruptcy with his stores, and that it was an intentional act by Dunkin’ to eliminate him from the system.
In recent years, Dunkin’ Brands has been accused of hardball tactics in terminating smaller franchisees, under the guise that they have breached their contracts. Franchise operators have alleged that they then sell the stores to large multi-unit operators of Dunkin’s choosing.
According to court documents, the judge dismissed the jury on the seventh day of trial. He also granted Dunkin defendants’ oral motion to preclude the testimony of Barkan’s damages expert, Frank Torchio. The expert witness was to give evidence that Barkan would have made $13 million if he had received the refinancing and continued to open his additional stores. But after hearing arguments from both parties, Judge Lagueux gave his oral judgment in favor of Dunkin defendants’, which suddenly concluded the trial.
Barkan would only say that he was not giving up. “There were serious mistakes in the judgment and we intend to appeal. Now, instead of it taking five years it looks like it is going to take ten.”
Arthur Pressman of Nixon Peabody, lead counsel for Dunkin’ Brands in the case, declined to make comment.
Karen Raskopf, senior vice president of communications for Dunkin' Brands, Inc. issued this statement:
From the beginning, we believed that Mr. Barkan's lawsuit against Dunkin' Brands was frivolous, and we are very pleased that Judge Lagueux agreed with our position. In his decision, Judge Lagueux confirmed our position that there was no evidence of fraud or breach of contract on Dunkin' Brands' part, and furthermore that Dunkin' Brands did the best we could to assist Mr. Barkan as he tried to restructure his debt. Mr. Barkan's former restaurants are flourishing under new franchisee management, and we look forward to continuing to serve the people of Providence our high-quality coffee and bakery products."
In conclusion, Barkan said that he was disappointed in the lack of support from the franchisee community. “There were plenty of opportunities to show its support but it has been mostly silent, in spite of my attempts to reach out. I guess that’s life.”
He feels there were franchisees and groups that could have helped their case, but just wouldn’t for the obvious reasons. He feels Dunkin’ made him out to be the “devil” and most franchisees are petrified of that, they don’t want to get involved. [Franchisees are afraid that they will be singled out like Barkan and be made into a public example of a devil by their franchisor.]
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