ATLANTA Raving Brands is looking to put its legal woes behind it and preparing for growth while readying the launch of a new concept, said Daryl Dollinger, newly appointed president of the Atlanta-based company. —Following a major management overhaul, multi-chain franchisor
Dollinger succeeded Stephen M. LaMastra, who left Raving Brands along with several other officials during the past few months following what Dollinger termed a “mutual understanding.” Others included company co-founder Seth Salzman, chief financial officer Tom Herman, vice president and house counsel Anne Friesen, senior vice president of corporate operations John Amend, and the head of the Doc Green’s Gourmet Salads & Grill chain, Carl Griffenkranz. —Following a major management overhaul, multi-chain franchisor
The departures came as a pared-down Raving Brands continued to battle several lawsuits filed against it by franchisees. The company, which once boasted nine concepts, has sold off three in the past year, including Moe’s Southwest Grill, Mama Fu’s Noodle House and PJ’s Coffee. —Following a major management overhaul, multi-chain franchisor
The concepts now in Raving Brands’ portfolio include 12-unit Doc Green’s, seven-unit Boneheads Grilled Fish and Piri Piri Chicken, 140-unit Planet Smoothie, 80-unit Shane’s Rib Shack and six-unit The Flying Biscuit Café, a full-service operation. Raving Brands also franchises the 23-unit Monkey Joe’s chain of entertainment centers. —Following a major management overhaul, multi-chain franchisor
In an interview following the executive departures, Dollinger said his goal for the company is to continue to support existing franchisees and grow existing brands through franchise sales despite the ongoing lawsuits. —Following a major management overhaul, multi-chain franchisor
Martin Sprock, who remains Raving Brands’ chairman and chief executive, was unavailable for comment for this article, but he was recently quoted in the Atlanta Journal-Constitution as saying he was undeterred in his efforts to add franchise concepts. —Following a major management overhaul, multi-chain franchisor
Sprock told the Journal-Constitution that another of his company’s brands could be sold in the next year to 18 months, although he would not identify it. Sprock also was quoted by the newspaper as indicating that the name of his company might be changed to remove negative connotations that might have attached as a result of the lawsuits. —Following a major management overhaul, multi-chain franchisor
The franchisee litigation has been ongoing since November 2006, when more than 40 Mama Fu’s operators in six states filed a lawsuit in Fulton County, Ga., charging Raving Brands with fraud, misrepresentation and breach of contract. The 17-unit Mama Fu’s chain, which was created in 2003 and at its peak had 40 units, was sold in March to a Texas franchisee. —Following a major management overhaul, multi-chain franchisor
In March 2007, just months before the company sold the 360-unit Moe’s Southwest Grill chain to Atlanta-based Focus Brands, three former Moe’s franchisees in Southern California filed a lawsuit in Los Angeles charging Raving Brands with fraud, unlawful trade practices and violating state franchise investment laws. The franchisees, who at one point had four Moe’s units, are seeking $3.9 million in damages. All of their units are now closed. —Following a major management overhaul, multi-chain franchisor
In January, two franchisee groups involved in the Doc Green’s concept since 2005 filed suit in federal court in Atlanta alleging fraud, breach of contract and misrepresentation of the potential of the Doc Green’s franchise system for developing and supporting it. Named in the suit were Sprock, Dollinger and recently exited Doc Green’s chief Griffenkranz. —Following a major management overhaul, multi-chain franchisor
In June the company completed the sale of its 48-unit PJ’s Coffee division to New Orleans Roast LLC and New Orleans Brew LLC of Louisiana. —Following a major management overhaul, multi-chain franchisor
Almost all of the recently vacated executive spots were filled through internal promotions, except for legal counsel, which is now handled externally, Dollinger said. —Following a major management overhaul, multi-chain franchisor
Salzman, who was most recently running Boneheads, was replaced by Michael Devilliers. And Griffenkranz was succeeded by Valerie Anderson. —Following a major management overhaul, multi-chain franchisor
Dollinger, who was formerly executive vice president and has been with the company since its founding in 2003, said he looks at the recent divestitures and departures as an opportunity to focus on future growth and to launch a new concept, likely before the end of the year. —Following a major management overhaul, multi-chain franchisor
Amend, the only former executive who could be reached for comment, said he believes that the company will in fact sell off the bulk of its brands. —Following a major management overhaul, multi-chain franchisor
“If they sell Shane’s and Planet Smoothie, the current primary drivers, there will be nothing left,” he said. “Doc Green’s is not growing, Flying Biscuit is too small and Monkey Joe’s isn’t even a foodservice operation. To me, the company has been winding down and the writing has been on the wall for a while. Raving Brands will likely just be a holding company for the lawsuits.” —Following a major management overhaul, multi-chain franchisor
Amend, who oversaw the company’s supply chain, said that toward the end he saw very little corporate infrastructure remaining. Dollinger acknowledged the company now employs 85 employees, down from more than 120. —Following a major management overhaul, multi-chain franchisor
Miami attorney Bob Einhorn of Zarco Einhorn Salkowski & Brito, P.A., a specialist in franchisee lawsuits and co-counsel on all of the suits against Raving Brands, said none of the lawsuits has been brought trial yet, but the Atlanta court has indicated some of the cases may be heard starting in September. —Following a major management overhaul, multi-chain franchisor
Asked about the ongoing lawsuits, Dollinger said the company is dealing with it “as it comes.” —Following a major management overhaul, multi-chain franchisor
“We have to deal with it every day,” he said. “A lot of it we feel is unjust, especially for brands we don’t have anymore, but in the end it will all come out to be frivolous. It doesn’t seem to affect our ability to sell franchises.” —Following a major management overhaul, multi-chain franchisor
Dollinger said that the company already has sold more than 119 franchises this year. —Following a major management overhaul, multi-chain franchisor
“Most don’t even ask about lawsuits though we do disclose the lawsuits on our Uniform Franchise Offering Circular,” he said. —Following a major management overhaul, multi-chain franchisor
