Cuppy's Coffee Goes to Court: SBT Sues Elite Mfg.
July 3, 2008, Supreme Building Technologies, Inc. filed a lawsuit against Elite Manufacturing, LLC. for breach of contract, trade secret misappropriation and unfair competition. In short, SBT alleges that Elite has stiffed them for $1.7M in fees for inline construction of Cuppy's Coffee stores, and fabrication of Cuppy's coffee kiosks, carts and mobile units.
Additionally, SBT alleges that Elite Manufacturing has reneged on its contract by working with their subcontractors directly, cutting SBT out of the process - and revenue.
The lawsuit and list of invoices are posted at Unhappy Franchisee .
The complaint alleges that:
In January, 2007, Elite manufacturing (a "franchisor of coffee shops") hired SBT to perform its inline and modular construction and act as general contractor for all of Elite's franchise buildings and structures. For inline construction, SBT was to receive 10% upfront as a downpayment, 30% when a building permit was issued, 30% on commencement of build-out, and 30% final payment within 10 days of completion. For modular construction of mobile units, carts and kiosks, SBT was to receive 50% upfront, and 50% within 10 days of completion.
About 3/4s of the inline construction contracts appear to be for either $100,000 or $120,00, though some were as low as $80,000 and others were as high as $150,000.
Documents filed with the complaint include unpaid invoices dated from October, 2007 to June, 2008 for work done on inline construction totalling $1,427,805.51 and modular construction totalling $324,101.36. The invoices reflect work performed for 44 separate inline franchise locations and 11 franchise mobile units or kiosks.
When the locations listed in the invoices are cross-referenced with the Cuppy's Coffee website, 13 of the inline franchises and 6 of the modular locations are listed as "Open," 14 of the inline and 4 of the modular locations are listed as "Coming Soon," and 17 of the inline locations and 1 modular location are not listed at all.
Who is Supreme Building Technologies, Inc.?
The Articles of Incorporation list Alvin Handshoe of 335 Lane 340 Jimmerson Lake, Freemont, IN as sole stockholder. John Rodesiler has been referred to as SBT President and he and Rob Folk represented SBT at city council meetings.
According to a November, 2007 press release , "The Indiana Economic Development Corporation provided Supreme Building Technologies up to $225,000 in performance-based tax credits and up to $35,000 in training grants based on the company’s job creation plans. With assistance from the Steuben County Economic Development Corporation, the City of Angola will provide the company with property tax abatement."
A representative from the IEDC confirmed that they are "looking into" the situation.
What do you think? Is SBT another victim? Or is this a clever maneuver to avoid paying the many who are owed refunds and payments from Elite Manufacturing?
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