A lawsuit between them wasn’t enough to sever the
relationship between O’Charley’s and its first franchisee, a firm in
Michigan that sued to get out of its 15-location development contract
Saalfeld said the development schedule was altered; he wouldn’t say whether Meritage is still obligated to finish building 15 O’Charley’s restaurants. Meritage now has five O’Charley’s, all in Michigan, and more than 40 Wendy’s restaurants.
The original lawsuit claimed O’Charley’s executives had misrepresented sales figures to get the franchisee to sign its 15-location development deal.
A sales shortfall meant a lender never extended credit to Meritage, and the company had to sell some Wendy’s real estate holdings to finance the development of more O’Charley’s restaurants, according to the suit.