Unhappy Franchisee has learned that three franchisee groups have joined together to sue franchisor Make & Take Gourmet. The groups include franchisees Shawn & Lisa Tyszka, of Syracuse, NY, owners of the now-closed Camillus, NY Make & Take Gourmet franchise; Eugene & Cheryl Grenga of Liverpool, NY, owners of the now-closed Baldwinsville, NY Make & Take Gourmet franchise; and Brian & Lisa Clark of Clifton Park, NY, owners of the now-closed Clifton Park, NY Make & Take Gourmet franchise.
According to the complaint, “The Tyszka Group, Grenga Group and Clark Group seek damages, punitive damages and rescission of certain licensing, franchise and related agreements, and for attorneys’ fees and costs, related to defendant Make & Take’s sales of franchises in violation of New York General Business Law 683 and 687, and common law fraud pursuant to the laws of the State of New York.”
Allegations common to the three groups include:
Illegal earnings claims. Franchise companies are prohibited from providing sales or profitability information, or projections of potential sales or profitability, except in a specific, designated format within franchise disclosure documents. The three franchisee groups allege that prior to entering into their agreements, Make & Take Gourmet provided them with oral and written earnings claims as to the levels of revenue and profit that they could expect their franchises to yield.
Sale of unregistered franchises. In order to sell franchises in the state of New York, franchisors must be registered with the New York State Department of Law, Office of the Attorney General. The three franchise groups allege that Make & Take Gourmet sold them unregistered franchises, in violation of New York state law.
Violation of franchise disclosure laws. Franchisors must comply with rules and regulations regarding pre-sale disclosure of certain information furnished in a designated format called a Uniform Franchise Offering Circular (UFOC) which contains required information about the franchisor company, management, rights and obligations of both parties and the specifics of the franchise agreement between the parties. The three franchisee groups allege that they were never furnished with a UFOC prior to purchasing the Make & Take Gourmet franchise.
Also named in the lawsuit is Bond, Shoeneck, & King, PLLC, of Syracuse, NY, Make & Take Gourmet’s law firm.
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