DELI DELICIOUS Sues Franchisee For Serving Fresh Bread
It sounds like a headline from the satire site The Onion, but it’s true: Deli Delicious is suing its franchisees for serving the freshly baked bread from Basque French Bakery. Deli Delicious Franchise Inc. is forcing franchisees to switch to a frozen and thawed bread for the same price. But shhhh…. Don’t tell the customers!
(UnhappyFranchisee.Com) A franchisee of the
51-unit 45-unit Fresno-based Deli Delicious chain is being sued for continuing to provide the fresh-baked bread that’s been served by the popular regional chain for 22 years.
The Deli Delicious Franchising Inc. Bread Lawsuit filed in California Superior Court, County of Fresno, seeks to force the multi-unit franchisee to purchase frozen loaves from its new, inexperienced affiliate bakery, store them in the location’s freezer, then eventually thaw and serve them to unsuspecting customers.
Also read: The BREAD That Froze Deli Delicious’ Growth.
Deli Delicious Launches Bake-and-Switch Ploy
“We were attracted to Deli Delicious because of the company’s commitment to serving the highest quality sandwiches with the freshest ingredients possible,” claims franchisee Borzooyeh Dielemani. “That is what we owe our loyal customers. We think switching to a frozen product is not only unethical, it’s a terrible, terrible business decision.”
Sean Kelly, a 30-year veteran of the franchise industry and publisher of watchdog site UnhappyFranchisee.Com, says the complaint reads like a satirical story from The Onion.
“I’ve seen many lawsuits and terminations against franchisees for substituting cheaper or inferior products or ingredients,” says Kelly, who has been reporting on the growing controversies related to the Deli Delicious franchisor, DDFI. “I can’t recall another franchisor suing a franchisee for refusing to lower the quality of its products.”
According to Borzooyeh Dielemani, the franchisor previously required franchisees to purchase bread from Fresno’s Basque Bakery, which had supplied fresh baked bread to Deli Delicious locations daily for 22 of its 57 years in business.
Basque Bakery head Calls DDFI Allegations “Total B*llsh*t”
The lawsuit complaint (which refers to Basque as “Third Party Bakery”) claims that DDFI had worked with Basque as late as October 24, 2018 to resolve its “frustrations” that the respected bakery’s equipment and facilities were outdated and could not keep pace with the growth of the Deli Delicious chain.
As a result of those frustrations, the complaint states, “on or about February 8, 2019, Deli Delicious elected to remove the Third Party Bakery as the designated vendor for bread products and designated Deli Delicious’ affiliate, D.D.’s Bakery, as the designated vendor of bread products to be used in its franchises.”
However, in news interviews at the opening of the affiliate bakery owned by Deli Delicious founder Mohammad Hobab and EVP Ali Nekumanesh, Nekumanesh states that the plan to open a commercial bakery (and profit from franchisee bread purchases) was hatched three years earlier, in 2015.
In those interviews, Nekumanesh never mentions that franchisees would be required to buy the bread frozen and possibly eliminate profitable products to make room in their freezers.
Deli Delicious Violates Trust of Basque Bakery, Franchisees & Customers With Half-Baked Plan
The owner of Basque Bread, Al Lewis, disputes the claim that his bakery couldn’t keep pace with demand.
“That’s total b*llsh*t,” said Lewis, when informed of the complaint. “In our 57 year history, we never had an issue or complaint about keeping up with demand. We’d have no problem supplying 100 stores as we are, and could easily add capacity for up to 200 stores. Their oven can bake 4 loaves a minute. Ours can bake 50 per minute.”
According to Kelly, DDFI is following the path of the increasingly greedy franchisors who try to squeeze every cent from the franchise relationship rather than build long-term, enduring success.
“It appears that DDFI is willing to sacrifice quality and trust for short term profit. McDonald’s maintained its focus on quality and treated its vendors as valued partners. It grew to be one of the world’s best-known brands,” says Kelly. “Quiznos prioritized short term profits ahead of franchisees or customers, and crashed with thousands of failed stores and millions owed in lawsuits.”
“Normally, franchisors are the ones fighting to preserve the integrity of their brand.
In this case, it seems to be Deli Delicious franchisees who are fiercely trying to preserve the chain’s image for quality, and to save the franchisor from undermining its own brand.”
– Sean Kelly, Publisher, UnhappyFranchisee.Com
Franchise Disputes Could End Growth
Kelly says it’s unlikely Deli Delicious will ever grow to a hundreds, much less thousands, of locations with their current practices. They are not currently registered to sell franchises in California, and have also waged separate lawsuits against Mohammad Hobab’s son, Hadi, and former executive Tim Campbell for allegedly criticizing their management decisions… including “cheating its franchisees by requiring them to purchase through approved vendors.”
Adds Kelly, “Normally, franchisors are the ones fighting to preserve the integrity of their brand. In this case, it seems to be Deli Delicious franchisees who are fiercely trying to preserve the chain’s image for quality, and to save the franchisor from undermining its own brand.”
A petition to urge DDFI to allow franchisees to serve freshly baked Basque Bread is published here: Deli Delicious Bread Petition.
The petition to End the Vindictive Deli Delicious Lawsuit against Hadi Hobab: End the Deli Delicious Lawsuit Petition.
A satirical Twitter account called Deli Malicious has popped up here: Deli Litigious Parody
Media Inquiries: For more information, documentation and interview requests, contact Sean Kelly at UnhappyFranchisee[at]Gmail.com.
See the complaint document here: Deli Delicious Franchising Inc. Bread Lawsuit
Support the Cause!!! If you’d like to keep this reporting and discussion going, please consider a contribution to the Deli Delicious Franchise Assessment GoFundMe Campaign , or to UnhappyFranchisee.Com.
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FRANCHISE DISCUSSIONS by Company
ARE YOU AN DELI DELICIOUS FRANCHISE OWNER OR FORMER FRANCHISEE?
ARE YOU A DELI DELICIOUS CUSTOMER WHO LOVES FRESH BREAD?
ARE YOU FAMILIAR WITH THE DELI DELICIOUS FRANCHISE ORGANIZATION & IT’S PRACTICES?
ARE YOU FAMILIAR WITH ALI NEKUMANESH, MOHAMMAD HABOB OR OTHERS DISCUSSED HERE?
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3 thoughts on “DELI DELICIOUS Sues Franchisee For Serving Fresh Bread”
The Deli Delicious Franchise Association has voiced its opposition to this lawsuit and spoken out in Support of the franchisees being sued by DDFI for serving fresh bread. We obtained a copy of this email sent from the Association:
Whether you are an active or inactive association member we thought you should know..
We bring everyone’s attention to Borzooyeh and Sam being sued over using Fresh Basque bread and refusing to use Frozen DD Bread.
As many of you already know Borzooyeh works his tail off at his locations every single day and aims to provide the freshest quality to his customers.
Now he’s being targeted by the DDFI and he and his partner are being sued.
Unfortunately, many other franchisees have also been threatened to be sued over the use of Fresh bread compared to DD Frozen bread.
It’s clear for the majority of us, we did not sign up for this. When we bought into this franchise we bought into the main components of the recipe – FRESHEST ingredients possible! Not Frozen bread.
During this past year DDFI has never directly acknowledged DDFA and its efforts to bring compromise and solutions, it truly shows the shade in how DDFI operates. It’s clear that their intentions lie in their DD bread factory and not of the best interest of the success of its franchisees.
How does a franchise system work if the franchisor’s best interest is not with the franchisees?
It’s clear when they are willing to sue one of their most successful multi unit franchisees and verbally threaten many others in the same way due to the fact they wish to continue to serve Fresh qualifty bread.
See for yourself an article has been published here:
DELI DELICIOUS Sues Franchisee For Serving Fresh Bread
It’s been a year now since DDFA formed, and we have always communicated these four main principles for our company:
1. Fresh bread Basque vs DD Frozen Bread
2. Expertise in front office – and not just corporate shakedowns, arm bending, and targeting.
3. Marketing and Advertising Transparency
4. Lower Food / Paper costs
With the exception of recent marketing campaigns and LTO’s there has been little progress and transparency everywhere else.
It has also been discovered that Corporate has been miscalculating and over charging our third-party royalties and charging us on our sales tax. A request was submitted to Jennifer at corporate for an updated report on the miscalculation but Zero response has been provided.
We requested a final deadline for the update on the miscalculated reporting by July 27th, 2020. We will keep you updated if there is any response from Jennifer or any one from DDFI.
DDFA will always continue to support and be the collective voice for the franchisees.
DD Franchise Association
1099 E. Champlain Dr. Ste. A #213
Fresno, Ca 93720
It’s not like frozen bread is a new thing. Bread and dough freeze well and the product can taste just as fresh as fresh baked bread. Au Bon Pan has been doing it for years. Panera Bread sends frozen dough to their stores to bake off on premises. Even Dunkin Donuts has a “Just Baked” program where the franchisees in some stores get frozen donuts and the store heat them and finish them off in the store.
The Deli Delicious problem seems to lie with how it was handled. Secrecy, and the demand to purchase the frozen bread from the franchisor are at the root of the problem.
I can see that the franchisor had big problems. 1. Relying on a bakery supplier in Fresno will stunt your ability to expand. 2. Franchises not equipped with an oven limits the ability to bake off in the stores. 3. Going to a commissary method similar to Panera is expensive. 4. Limited freezer space in the stores.
Those are tough problems to solve.
Thanks for your comments and insights, Jim.
I know that 65%-70% of sandwich and sub chains get frozen dough which they bake-off on-site. The rest report getting fresh bread delivered on a regular basis. I haven’t found any that use a fully baked frozen bread that they thaw-and-serve… or at least admitted it to me. Do you know of any?
But I agree completely that the bigger issue is how they handled it – with no input from or regard for franchisees. This is definitely the rookie mistake of an inexperienced authoritarian franchisor who thinks they can simply bark orders and their intimidated franchisees will do it and like it. They also do not understand the key role vendor relationships play in the growth of a franchise chain or else they wouldn’t have abused Basque Bakery in the manner that they have. Plenty of other early stage bullies managed to grow (Subway, Quiznos), but they at least knew how to fake regard for their franchisees. DDFI won’t even communicate or address concerns – either with me, the business media or their franchisees. They’ve got lawyers on speed dial.
They haven’t figured out that even if they win individual battles, they will lose this war by destroying their once-positive reputation and having a hard time selling franchises if they get registered again.