This article details the legal disputes and subsequent law suit between franchisor Quaker Steak & Lube and a franchisee in Pennsylvania. The franchisee claimed:
- [franchisor] lied to him about the restaurant’s prospects for profitability;
- approved too large a restaurant for the State College market;
- forced him to use a select list of food vendors and menu choices that hurt his chances for profitability; and
- did not provide adequate training, startup marketing or operational support.
The franchisee claims a projected $100,000 weekly gross sales ($5.2 million annually) was given to him by the franchisor, when actual revenues were $80,000 a week in 2006, $61,000 a week in 2007 and $45,000 a week in 2008. The judge agreed with the franchisor that the projections were simply that – projections and not historical fact or earnings claims.All other claims were also denied by the judge. That’s how these law suits usually end unless there is real “smoking gun” evidence of a breach of the franchise agreement or fraud.