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A lawsuit was filed against the publicly traded franchisor in 2008.
Noble Roman's, Inc., a franchisor of Noble Roman's Pizza and Tuscano's Italian Style Subs, has reported that the superior court in Hamilton County, Indiana, has granted summary judgment in favor of the company against all of the plaintiffs in a long-running lawsuit. As a result, the Plaintiffs' allegations of fraud against the company and certain of its officers were determined to be without merit. The company's counterclaims against the plaintiffs for breach of contract continue to be pending.
The Plaintiffs claimed $5.1 million in damages according to the report in Trading Markets
The Plaintiffs alleged that the Defendants fraudulently induced them to purchase franchises for traditional locations through misrepresentations and omissions of material facts regarding the franchises. The Plaintiffs sought compensatory and punitive damages. The Plaintiffs that remained in the case following the voluntary and involuntary dismissals described above claimed actual damages aggregating $5.1 million. In addition, some claims included punitive damages, court costs and/or prejudgment interest.
The franchisor is going after the Plaintiffs and it appears they will not be taking any prisoners
The company filed counter-claims for damages for breach of contract against all of the Plaintiffs in the approximate amount of $3.6 million plus attorneys' fees, cost of collection and punitive damages in certain instances. The company intends to prosecute the counter-claims and obtain and execute on any judgments against all Defendants. Paul Mobley, the company's Chairman, commented, "We obviously are pleased that the Court agreed with our position, however, for more than two years we have had to devote significant financial and personnel resources to defending ourselves against these meritless allegations. This development removes a distraction and enables us to intensify management's concentration on growing our non-traditional venues and grocery store products."
About the Author: Ed Teixeira has over 35 years of franchise industry experience as a franchise executive and franchisee. He has served as a franchise executive in the c-store, manufacturing and home healthcare industries and has licensed franchises in Asia, Europe and South America. Ed operates FranchiseKnowHow which provides information and advice to prospective and existing franchisees and franchisors. He publishes newsletters for the franchise community.