After three years of difficult litigation across the country, a United States Magistrate Judge in Pennsylvania once again has dissected Quiznos’ ongoing franchise battle in Martrano v. Quiznos Franchise Co., 2009 WL 1704469 (W.D. Pa. June 15, 2009). In analyzing Quiznos’ motion to dismiss, the Pennsylvania court issued a decision with heavy citation to a Wisconsin court’s treatment of a similar Quiznos motion to dismiss in Westerfield v. Quizno’s Franchise Co., LLC (see Issue 101 of The GPMemorandum). The Pennsylvania court then dismissed only the franchisees’ claims of criminal theft (finding no private cause of action), and antitrust violations under the Sherman Act (finding franchisee’s “Quick Service Toasted Sandwich Restaurant Franchise” a bit too narrow to constitute the relevant market). The court found the rest of the franchisees’ claims, which included several RICO claims, fraud in the inducement, breach of contract, and breach of covenant of good faith and fair dealing, to be much too factually disputed to be dismissed as a matter of law. Similar cases are pending in Wisconsin and Colorado.
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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP.
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