Dunkin' Shop Closed Over Legal Dispute

Dunkin’ Brands is in the news again, after a day or two of quiet. This time they are in the news for a lawsuit that fizzled out because the franchisee couldn't afford the fight. The chain terminated franchisee Stan Furash for not maintaining a sufficient supply of ice cream in his Dunkin Donuts/Baskin Robbins shops in Florida. The Bradenton Herald reports:

In regards to the stores’ ice cream supplies, Furash said the company agreed to allow them to terminate the Baskin Robbins agreement. “They gave us the option to terminate the Baskins’ agreement,” Furash said. “But then they changed their mind.” –

Unfortunately, the franchisee didn’t attend the required training course for breaking operating standards. Worse yet, the franchisor says that Furash didn’t pay owed franchise (royalties?) and ad fees. Frankly, that’s a big no-no.

… the Manatee Avenue West store owes $20,917 in franchise and advertising fees, and the 14th Street West shop owes $13,033.

So his shops serving both doughnuts and ice cream must go. Dunkin’ is terminating the franchise. The franchisee thinks he knows why the franchisor so easily got rid of his franchise.

Furash said Dunkin’ Donuts forced him and his wife out of their franchise agreement so the corporation could profit from legal and violation fees.

The franchisee says he doesn’t have the stomach or the money to fight the giant franchisor.

Dunkin’ Donuts notices of termination were filed in October 2008 and Jan. 26, and the franchisees had attempted to fight the closings. However, Stan Furash said he and his wife could no longer afford the legal fees. “We made a name for ourselves and the brand in Bradenton,” Stan Furash said. “Even in the recession, we were doing $2 million (in annual revenue) between the two stores.