Edible Arrangements Settles with Franchisee Association

A NYC Edible Arrangement. photo/bmm

BRIDGEPORT,  Conn. – The Edible Arrangements Independent Franchisee Association announced that it has successfully settled its three-year litigation against its franchisor, following a lengthy negotiation process.

One of the most important issues the franchisee group has now resolved is the new corporate policy that store owners must keep their business in operation for longer period of time each day, and on Sundays.

The EAIFA executive board member Sherri Vertorano said, “As a result of the settlement, the Sunday hours mandate will now be optional for existing store owners, and new minimum operating hours will can now change to 9 a.m. to 7 p.m., Monday through Friday, and 9 a.m. to 5 p.m. on Saturday. 

As background the EAIFA legal dispute began in 2010. CEO Tariq Farid began imposing revisions to franchise operations without giving store owners the chance to give their input. Franchisees said the corporate office was misusing its advertising and national television funds, and not properly allocating the money. They also objected to Edible Arrangements having complete control over customer orders their its centralized call center. After the franchisor processed the payments, it deducted its own fees and then paid the store owners. Franchisees also stated that the franchisor was competing with their businesses.

When the lawsuit was filed, the district court determined that the franchisee group had associational standing, and could sue on behalf of its members. Edible Arrangements fought the ruling, with filings of unsuccessful motions to reconsider the decisions and then its appeals. As the attorneys on both sides continued their proceedings on determining what the procedural landscape of the case was going to be, talks began regarding a resolution to the dispute.

Attorney Justin M. Klein of Marks & Klein, representing the franchisee association, feels the conclusion to the three-year litigation is very important to all franchisees. He said this has been the most prominent case with respect to franchisees joining together and suing on behalf of the association where they were successful. “The fact that they were permitted to pursue their claims on behalf of the association should tell other franchisees that they need to have a strong association. Franchise owners need to be prepared to stand up for their rights when company mandates are detrimentally impacting your business,” Klein stated.

The New Jersey attorney also said this settlement was exactly what the franchisees were asking for three years ago when they filed their lawsuit against Edible Arrangements. “This is also a message to franchisees that they should not give up in fighting for what they want from their franchisor,” he advised.

But more importantly, Klein said it should be a message to franchisors that they need to take the time to listen to their franchisees and their association and deal with the problems head on. “They shouldn’t be forcing them to go to litigation and spending hundreds of thousands of dollars to get to a resolution that could have just as easily been done by business people sitting around a table and being more reasonable,” he exclaimed.

Leaders of the EA Independent Franchisee Association Sherri Vertorano, Ken Ruguinis and Kevin Barton said in a statement, “Edible Arrangements and EAIFA have committed to work collaboratively to advance the goals the EAIFA and the Edible Arrangements brand, which include striving for a positive relationship between EAI and the franchisee community as a whole.”

They also said that the franchisor has committed to endorse their association and its stated goals. They added, “EAIFA looks forward to the bright future ahead for the Edible Arrangements brand and to the productive relationship between Edible Arrangements and the EA Independent Franchisee Association.”

Edible Arrangements' CEO Tariq Farid responded to Blue MauMau, stating, "Effective collaboration with franchise partners is the foundation of Edible Arrangements, and we look forward to working closely with the EA Independent Franchisee Association.  Our mutual goal is to channel all the positive energy we developed in our recent discussions into creating long-term collaboration with all franchise partners for the betterment of Edible Arrangements. Their inclusion in this environment will foster positive, interactive dialogue to benefit our whole system."

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