In an important decision upholding a contractual prohibition of collective actions, a Colorado federal court last month refused to certify a class of franchisees in Bonanno v. Quiznos Franchise Co., 2009 WL 1068744 (D. Colo. Apr. 20, 2009). This ruling was based on language in the franchise agreement that a franchisee’s claim “may not be consolidated with another proceeding between Franchisor and any other entity or person.” The court found this clause an effective bar to the proposed class action fraud challenge to the franchisor’s practices for selling Quiznos franchises. In so ruling, the court found that the franchise agreement prohibition of collective actions was not unconscionable or overreaching under Colorado law, nor was the alleged “right” to proceed as a class akin to such things as waiver of a right to a jury trial. In short, the “plaintiffs do not have a substantive right to proceed as a class,” the court held.
Several other motions remain pending in the case, including a request by the franchisor for summary judgment.
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