ATLANTA —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
In January two franchisee groups involved in the company’s Doc Green’s Salads & Grill 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 and the system for developing and supporting it. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
The lawsuit is similar to several other suits brought against Raving Brands in the past two years by franchisees involved in other Raving concepts. Along with Doc Green’s, Raving Brands’ portfolio includes Mama Fu’s Asian House, Planet Smoothie, Shane’s Rib Shack, PJ’s Coffee and Flying Biscuit. Raving’s lone nonfoodservice operation is Monkey Joe’s, a chain of 12 indoor play areas. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Last summer the company sold its flagship franchise brand, the 360-unit Moe’s Southwest Grill, to multiconcept franchisor Focus Brands Inc. in Atlanta for an undisclosed amount. Just months before in March 2007, three former franchisees of the Moe’s brand in Southern California sought $3.9 million in damages in a lawsuit filed in Los Angeles charging Raving Brands with fraud, unlawful trade practices and violating state franchise investment laws. The operators at one point had four restaurants, all of which are now closed. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
In another lawsuit filed in Fulton County, Georgia, in November 2006, Raving Brands was charged with fraud, misrepresentation and breach of contract in litigation involving more than 40 franchisees of the Mama Fu’s Noodle House brand in six states. Mama Fu’s, which was created in 2003, at its peak had 40 stores. Today the website lists 16 in operation. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
As of press time, Raving Brands had not responded to the lawsuit brought by the Doc Green’s franchisees. Meanwhile, Raving Brands’ founder, Martin Sprock, and the company’s president and chief operating officer, Steve LeMastra, have refused to comment, citing a company policy regarding pending litigation. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Bob Casey, an attorney with Atlanta-based Casey Gilson Leibel PC, has worked with the plaintiffs involved in all of the cases, including the most recent concerning Doc Green’s, a concept founded in 2003. He noted that, as with the other suits, the two sides of the Doc Green’s case tried to avert litigation through negotiation but couldn’t reach a middle ground. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Named in the Doc Green’s lawsuit are Raving Brands, its founder Sprock and at least two executives associated with the company’s franchise system, including Daryl Dollinger and Carl Griffenkranz. Filed Jan. 17, the suit asks for an accounting to determine damages and requests the court to award damages for financial losses and antitrust violations as well as to cover all attorney fees. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Trent and Richard Schofield, owners of the Tampa, Fla.-based Schofield Restaurant Group, which once owned three Doc Green’s locations in the Florida cities of Tampa, Naples and Estero, are among those involved in the lawsuit. The Schofields continue to operate 10 Shane’s Rib Shack units in Florida. They converted one of the three Doc Green’s units to a Shane’s. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Another plaintiff is Charles Feehan, an Atlanta-area franchisee who, along with a partner, has five Shane’s Rib Shacks, with another in development, as well as three Doc Green’s units, all in metro Atlanta. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
“They sold us the franchise under the guise that Doc Green’s was an established brand, but that just wasn’t the case,” said Feehan, who left corporate America to join the Raving Brands’ system as a franchisee. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Although Raving Brands promoted the salad-themed restaurant as a solid franchise, saying it “had established a system of developing, opening, operating and promoting fast-casual restaurants offering gourmet salads and soups,” it was a mirage, Feehan said. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
“We filed the suit because we fundamentally believe that Raving Brands never had a comprehensive business model and system in place to support a franchise system,” said Feehan, who shared that in addition to the $20,000 licensing fee and royalties for each unit, he has spent a great deal of money opening and running the units. “We are trying to recoup our losses and want to keep them operating.” —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Feehan said that while he is not privy to other franchisees’ financial statements, he hears the “scuttlebutt” is that other Doc Green’s franchisees might file suit as well. According to Doc Green’s website, there are only 13 stores in operation, with the majority in Georgia. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
The Doc Green’s lawsuit alleges that Raving Brands also created a “fraudulent scheme” to make the one company-owned restaurant appear successful when potential franchisees came to observe the concept. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
To that end, the lawsuit claims, the company gave out coupons for free food, known as “Doc’s Dollars” to lure customers. The suit says: “The Doc’s Dollars campaign was distributed particularly aggressively on dates that potential franchisees were visiting in order to make the store appear busier than it was.” —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
In addition, the plaintiffs Green’s franchise agreement obligates franchisees to pay 2 percent of net sales to pay for a national advertising fund, Raving Brands failed to establish such a fund. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
“We continue to pay our fees to them because we don’t want to be in breach of contract, and frankly we feel it will give us better chance once this case is heard,” Feehan said. “We tried to negotiate with them for a long time before filing a suit, but we could never get this resolved that way, and they are in breach of so many things.” —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
The lawsuit against Doc Green’s also alleges that Raving Brands did not promote the brand as promised and that the company failed to help with general business operations. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
In addition, the lawsuit accuses Raving Brands and its executives of taking undisclosed kickbacks and charges them with 11 counts, including civil racketeering, fraud, breach of contract, negligent misrepresentation and more. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
“It’s tough for these small operators to afford litigation, but this is how bad the situation has become,” said attorney Casey. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
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, agreed with Casey. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
“There are a number of franchise systems that thrive on selling franchises, but usually litigation is not a logical option because of the high cost and the time spent,” he said. Still, he added, the plaintiffs he represents were up against a wall. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
“The Doc Green’s suit is just another example of a Raving Brands concept with no substance,” Einhorn said. “Like Mama Fu’s, it has a nice name and logo and that is about it. I don’t believe Raving Brands ever invests in these concepts to develop them into what a successful franchise should be. It’s like buying a car without an engine and then they later say, ‘Oh, you wanted an engine too?’ They are only works in progress.” —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Nonetheless, Raving Brands continues to market franchise opportunities. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
A Feb. 14 press release put out by the company noted that franchising continues to be an opportune path to follow for those small companies or entrepreneurial souls who want a piece of the American dream. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
The release discussed a Feb. 25 presentation in Las Vegas discussing franchise opportunities in Shane’s Rib Shack, Planet Smoothie and Monkey Joe’s, with no mention of the Doc Green’s or Mama Fu’s concepts that remain in litigation. Further, it cited the opportunity of turnkey startup with Raving Brands offering some of the lower costs of entry in the franchising industry. —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
Said Einhorn: “Without a doubt, Raving Brands is fairly unique in that it churns out an unusually high amount of franchise agreements.” —Raving Brands, the multiconcept franchisor based here, is again locked in a legal battle with the franchisees of one of its fast-casual brands.
