Bizjournals.com:

Former Petland Inc. franchisees are suing the Chillicothe chain for fraud, alleging the stores are doomed from the start – and the company knows it.

Columbus-based Luper Neidenthal & Logan and two New York firms filed a suit on behalf of two lead plaintiffs – franchisees in Nashville, Tenn., whose stores have gone out of business. The suit is seeking class-action status on behalf of all franchisees since November 1993, and asks for relief of about $20 million. It also seeks cancellation of franchise agreements, said Greg Melick, a Luper Neidenthal attorney representing the plaintiffs.

Melick estimates the average investment per franchisee totals up to $250,000, and the firms have been in contact with more than 40 franchisees.

The lead plaintiffs claim Petland fraudulently induced them to start a pet store when it knew, or should have known, the shops couldn’t succeed. A major allegation from franchisees, Melick said, is that pets supplied to the stores through Petland’s vendors were sick or dying.

Melick compared the franchisees’ problem to a restaurateur opening a new business and sending dozens of people to the hospital for food poisoning in its first weekend. More.

Originally posted by Cris Zimermann on December 4, 2008 in Franchise Site.

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