Dagwood’s Sandwich Franchise: Franchisees Allege Franchise Fraud
(UnhappyFranchisee.com) Dagwood and Blondie Bumstead are two of the most recognizeable, family friendly and beloved cartoon persona’s in America. But Dagwood’s Sandwich franchisees are alleging that their flesh and blood half-brother Dean Young, son of Blondie cartoonist Chic Young, used the Bumsteads to help defraud investors out of millions. According to Courthouse News:
Dagwood’s Is A Fraud, Franchisees Say Armed with nothing more than the rights to exploit the name "Dagwood," Dagwood’s Sandwich Shoppes, a franchisor, built its entire business upon fraud, 15 plaintiffs claim in Federal Court. "Fraud was the dominant trait for Dagwood’s from the moment it was conceived," the complaint states "… [from] the formation of the company, then to its opening, then to the raising of private funds, then to its sham operation of the system, then to its embezzlement of franchisee payments, then to its shady kickbacks to suppliers, then to its deliberate concealment of wrongdoing, then to the cooking of its books, and ultimately to its final declaration of bankruptcy."
The complaint continues: "Every penny invested into the fraudulent scheme by Plaintiffs – each of whom was a Dagwood’s ‘Market Partner,’ and each of whom was individually defrauded into funding Dagwood’s fraudulent scheme – has disappeared…. Hundreds of lives have been destroyed by the Defendants. …
Dagwood’s Is A Fraud, Franchisees Say
According to the lawsuit, Dagwood’s never had anything to sell to its Market Partners, its franchisees or its other investors. Only a few stores ever opened, and none of them was profitable. The Dagwood’s "Market Partners" were "Master Franchisees" who paid for the right to be able to sell franchises to others within their own territories. The Courthouse News article states that the Market Partners job was "to save Dagwood’s the money, time, effort and research required to create a restaurant franchise system that worked" but that the franchisor was "simultaneously deceiving the Market Partners that such a system existed."
The lawsuit was filed in Florida Middle District Court, Pinellas County, March 24, 2008 Case Number: 8:2008cv00545 Amount Demanded: $1,000,000.00
Plaintiffs: Ed Chong, Mark Chambers, Bill Church, David Plevin, Jose Sanchez, Jay Lundblad, MP-CHM, Inc., MI-Way, Inc., USO1, D-Woods, L.L.C., Dagwood’s South Florida L.L.C., Dagwood’s On Pines, L.L.C., S & I Franchise, Inc., Steel City, L.L.C. and 460 Group L.L.C.
Defendants: Dagwood’s Sandwich Shoppes LLC, Dean Young, Lamar Berry, Frank Brown, Dave Pertl, Bob Hartford, Ron Collette, Robert Myers, Bill Ryan, Lance Harris, Dagwood’s Foodservice Group LLC, International Marketing Systems Inc., and Dean Young Enterprises Inc.
Plaintiffs are represented by David Walkowiak of Lutz, Fla., and Jeffrey Goldstein of Leesburg, Va.
Related stories: IS DAGWOOD’S SANDWICH SHOPPE A GREAT FRANCHISE OPPORTUNITY?
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