After a four-year battle, Red Roof Inns lost an $11,8 million jury verdict to its former Baton Rouge franchisee who claimed that the franchisor deliberately delayed a franchised hotel opening for its own financial gain. The franchisee claimed that Red Roof Inns had an interest in delaying the opening because it had another hotel in the market and its parent company had three motels nearby. The Dallas jury found that Red Roof Inns breached the franchise agreement by not allowing the franchisee to raise the Red Roof Inn flag after the franchisee spent $2 million renovating the hotel. Red Roof Inns recently announced its intention to appeal the verdict.
Posted by franchiselawblog at November 30, 2004 07:14 PM