PINKBERRY Franchise Complaints
Pinkberry franchise complaints include fraud, breach of contract, unfair business practices, violation of California’s Franchise Relations Act and Franchise Investment Law, misrepresentation, and violation of Florida’s Unfair and Deceptive Trade Practices Act.
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(UnhappyFranchisee.Com) Pinkberry is perhaps the trendiest, most-hyped franchise opportunity to come on the scene in recent years.
Pinkberry Ventures, Inc. is headquartered in Los Angeles, California.
There are currently more than 100 franchised Pinkberry stores.
Pinkberry has also been a magnet for controversy, from early charges of false advertising (for claims it marketed its product as frozen yogurt when it wasn’t, technically, yogurt) to the recent conviction of its founder for severely beating a homeless man with a tire iron.
Pinkberry Battling Franchisees in Court
Recently, it has come to our attention that Pinkberry’s relationship with some of its franchise owners is more sour than its tart yogurt.
We have heard rumors that franchise owners object to their treatment at the hands of the franchisor.
There have also been complaints about its business practices.
This year, Pinkberry was required to disclose two franchise lawsuits in its Franchise Disclosure Document (FDD).
In the first dispute, Pinkberry Ventures, Inc. terminated the four license agreements of franchisee Penninsular Group, LLC, and sued for non-payment of royalties and marketing fees, breach of contract and trademark infringement.
Penninsular Group, LLC filed a counterclaim alleging fraud, breach of contract, unfair business practices and violation of California’s Franchise Relations Act and Franchise Investment Law.
Here’s the disclosure in the 2013 Pinkberry FDD:
Pinkberrv Ventures Inc. Plaintiff v. Penninsular Group. LLC (United States District Court Central District of California Case No. CV13-021 filed March 25 2013). After terminating defendant’s four License Agreements following defendant’s failure to pay royalty and marketing fees. We brought this action for breach of contract and trademark infringement to recover fees due under the license agreements injunctive relief and treble damages for infringement of our trademarks and recovery of our reasonable attornev’s fees. On June 6, 2013 defendant filed an answer and counterclaim. The counterclaim alleges fraud. breach of contract, unfair business practices and violation of California’s Franchise Relations Act and Franchise Investment Law and seeks unspecified damages or alternatively rescission, restitution and reasonable attomev’s fees. The parties have submitted a stipulation to the court requesting that the court appoint a Special Master to hear and decide the case pursuant to the dispute resolution procedures in defendant’s license agreements. The time for us to respond to the counterclaims has not yet expired but we intend to vigorously deny the allegations in the counterclaim and prosecute our case. On July 22, 2013 we filed a motion to dismiss the counterclaim in its entirety. A hearing on the motion to dismiss has been scheduled for August 26. 2013.
In the second dispute, Pinkberry Ventures, Inc. stated that it had terminated the three license agreements of franchisee Pinkberry of Florida Inc. It was suing for non-payment of royalties and marketing fees, breach of contract and trademark infringement.
Pinkberry of Florida Inc. filed a counterclaim alleging fraud, misrepresentation, breach of contract, unfair business practices, violation of California’s Franchise Relations Act and Franchise Investment Law and violation of Florida’s Unfair and Deceptive Trade Practices Act.
Here’s the disclosure in the 2013 Pinkberry FDD:
Pinkberry Ventures. Inc. Plaintiff v. Pinkberry of Florida Inc.; Does 1 through 10 inclusive. Defendant (United States District Court Central District of California Case No. CV13-02662 filed April 16 2013). After terminating defendant’s License Agreements for three Pinkberry shops following defendant’s failure to pay royalty and marketing fees, we brought this action for breach of contract and trademark infringement to recover fees due under the license agreements, injunctive relief and treble damages for infringement of our trademarks and recovery of our reasonable attorney’s fees. On July 15, 2013 defendant filed an answer and counterclaim. The counterclaim alleges fraud, misrepresentation, breach of contract, unfair business practices, violation of California’s Franchise Relations Act and Franchise Investment Law and violation of Florida’s Unfair and Deceptive Trade Practices Act and seeks unspecified damages and /or rescission restitution and reasonable attorney’s fees. The time for us to respond to the counterclaims has not vet expired but we intend to vigorously deny the allegations in the counterclaim and prosecute our case. We also intend to file a motion to dismiss the counterclaim in its entirety by the August 9, 2013 filing deadline.
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Worked with Pinkberry toward procuring the development rights to Toronto in 2012. During the process, both their franchise development manager and their VP and lead counsel encouraged us to continue with the process, including (and this is where I have a problem) hiring a lawyer to go through the FDD and the Franchise Agreement in order (as they put it) to expedite the process. And all throughout the process, they continued to tell us we were going to be the candidates to “win” the territory and that it was essentially a done deal.
I resisted going to our lawyers (@ $600 per hour) until it was a firm deal. But they kept on insisting it would become a deal, and with the legal work done prior, it would therefore expedite things as we moved forward. This culminated in a conference call between our lawyer their VP, a 1.5 hour call that ultimately cost me over $1100. All the while, it could have been completely prevented if they had just waited until they were firm on us as their chosen candidate. Totally unfair and morally inexcusable behavior.
Long story short, their CEO determined in his wisdom that we were ultimately not the candidates they wanted. Not sure why he even has staff to make decisions for the company, as here is an example of him basically overturning a decision his employees thought everyone was on board with. But this he did, and as result of that reversal of decision, we are out a cumulative total of over $10,000 in legal fees as a result of micromanaging and lack of confidence in his higher level, appointed employees, ultimately leaving us in a circumstance wherein we were left holding the bag, a situation that could have been prevented with a little consideration and forethought.
I asked them to compensate us for the legal fees we incurred, citing that there was no need for us to pursue this (legal) area of the process until a final and firm determination had been reached. As you can imagine, they declined this suggestion. As a result, I feel other people should be made aware of this and be forewarned. Let my experience serve as a lesson to others, and if that is the “silver lining” to this otherwise frustrating and infuriating experience, then I guess that will have to do.
Unprofessional in their work with potential franchisees and developers. My advice, if they are interested in you, get it in writing before you engage in any legal fees, lawyer’s time etc. They should be accountable for the actions of two of their higher level employees, but they are not. It was unprofessional, period.
Was I disappointed in not “winning” the deal? Absolutely, but this note is not hard apples regarding that. I can take the good with the bad. This is about treating people fairly, and so I write this as a warning to anyone looking to make a deal with these people. Be careful, or look for other opportunities where you will be treated with more regard to the costs associated with simply pursuing a deal. Wholly unnecessary costs were incurred, and they know it too.
Great product, not so great treatment. Be careful, or better yet, think twice about dealing with them. And if you do, watch your back.