FRANCHISE LAWSUITS: Noble Roman’s Granted Summary Judgment Against Franchisees

Noble Roman’s franchise lawsuit news.  Kari Heyser, Fred Eric Heyser and Meck Enterprises, LLC, et al v. Noble Roman’s, Inc. et al, lawsuit was filed in Superior Court in Hamilton County, Indiana on June 19, 2008.

The franchisee plaintiffs alleged that Noble Roman’s fraudulently induced them to purchase franchises for traditional locations through misrepresentations and omissions of material facts regarding the franchises.

[Also read:  NOBLE ROMAN’S PIZZA: Worst Franchises for SBA Loan Defaults]

Noble Roman’s filed counterclaims for damages for breach of contract against all of the Plaintiffs in the approximate amount of $3.6 million plus attorney’s fees, interest and other cost of collection, or a total of over $5 million.

As a result of the Order filed January 26, 2012, the company’s partial summary judgment motions were granted as to specific types of damages such as past fees, future fees, attorney’s fees and interest.

Here is Noble Roman’s press release on the granting of the summary judgement.

press release  Jan. 30, 2012, 5:00 p.m. EST

Noble Roman’s Granted Summary Judgment on Counterclaims Against Plaintiffs

INDIANAPOLIS, Jan 30, 2012 (GlobeNewswire via COMTEX) — Noble Roman’s, Inc. /quotes/zigman/235863 NROM -5.67% , the Indianapolis based, non-traditional franchisor and licensor of Noble Roman’s Pizza and Tuscano’s Italian Style Subs, today announced that in an Order by the Hamilton Superior Court I filed January 26, 2012 in the long-standing lawsuit by certain former franchisees, Noble Roman’s was granted partial summary judgment as to liability against the Plaintiffs/Counter-Defendants on the company’s counterclaims against them. As a result of this partial summary judgment, the Court determined that certain of the former franchisees of Noble Roman’s, Inc. were liable to the company for direct damages and consequential damages, including net loss future royalties, for breach of their franchise agreements. In addition, the Court determined that, as a matter of law, Noble Roman’s was entitled to recover attorneys fees associated with obtaining preliminary injunctions, fees resulting from the prosecution of Noble Roman’s counterclaims and fees for defending against fraud claims against the company and certain of its officers. The amount of the award is to be determined at trial.

The company was a Defendant in a lawsuit styled Kari Heyser, Fred Eric Heyser and Meck Enterprises, LLC, et al v. Noble Roman’s, Inc. et al, filed in Superior Court in Hamilton County, Indiana on June 19, 2008 (Cause No. 29D01 0806 PL 739). The Court issued an Order dated December 23, 2010 granting summary judgment in favor of the company against all of the Plaintiffs allegations of fraud. As a result, the Plaintiffs’ allegations of fraud against the company and certain of its officers were determined to be without merit. Plaintiffs previously filed numerous motions, including an appeal to the Indiana Court of Appeals, in an attempt to get the December 23, 2010 summary judgment order reversed. All of those attempts have failed, including the Indiana Court of Appeals which dismissed the appeal with prejudice. Plaintiffs’ last attempt to get the summary judgment award vacated was their attempt to vacate the Order on the grounds of misconduct of third parties. On December 1, 2011, the Judge issued an Order denying their request and specifically found "that there was absolutely no evidence of misconduct and the Court admonished Plaintiffs and Plaintiffs’ counsel for making such unfounded allegations." The fraud charges against the company and certain of its officers have been dismissed entirely, and Plaintiffs have no appeal rights remaining.

The Complaint was originally against the company and certain officers and institutional lenders. The Plaintiffs are former franchisees of the company’s traditional location venue. 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. In addition to the above claims, one franchisee/Plaintiff in the case asserted a separate claim under the Indiana Franchise Act as to which the Court’s Order denied the company’s motion for summary judgment, as the Court determined that there is a genuine issue of material fact, but did not render any opinion on the merits of the claim. The company denies liability on the Indiana Franchise Act claim and will continue to vigorously prosecute its defenses against the claim.

The company filed counterclaims for damages for breach of contract against all of the Plaintiffs in the approximate amount of $3.6 million plus attorney’s fees, interest and other cost of collection, or a total of over $5 million. As a result of the Order filed January 26, 2012, the company’s partial summary judgment motions were granted as to specific types of damages such as past fees, future fees, attorney’s fees and interest. The amount of the damages awarded to the company will be determined at trial.

SOURCE: Noble Roman’s, Inc.    CONTACT: Paul Mobley, Chairman & CEO  317/634-3377

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NOBLE ROMAN’S PIZZA: Worst Franchises for SBA Loan Defaults

Our recent post 15 Worst Franchises by SBA Loan Defaults listed the franchise concepts with the highest rate of SBA loan defaults for 2008.

[Also read: FRANCHISE LAWSUITS: Noble Roman’s Granted Summary Judgment Against Franchisees]

Noble Roman’s Pizza franchise was listed as the worst.  According to Katie Adams of Investopedia:

1. Noble Roman’s Pizza

Billing itself as “The Better Pizza People,” this Indianapolis-based franchiser has had a tough time selling that proposition to customers.

While the company reported a 30% net income increase in Q1 of 2009, Q2 total revenues were down more than $500,000 from the comparable period in 2008.

Maybe that’s why 53% of all owners with SBA loans defaulted in 2008.

ARE YOU FAMILIAR WITH THE NOBLE ROMAN’S FRANCHISE OPPORTUNITY?  SHARE YOUR THOUGHTS BELOW.