An Illinois state court issued an order today requiring Krispy Kreme Doughnuts to continue supplying a struggling mega-franchisee despite the franchisee's inability to pay amounts due under the franchise agreement. Sweet Traditions, LLC, a franchisee that operates numerous Krispy Kreme franchises in Illinois, Missouri and Indiana, filed suit in the Illinois Circuit Court for St. Clair County against the company, claiming that the company violated the franchise agreement by charging high prices for supplies and equipment, undercutting retail shops by selling its doughnuts in convenience stores and supermarkets and engaging in suspicious business practices that over-inflated corporate earnings. Specifically, as reported in New York Times reports that Krispy Kreme plans to appeal the order and to remove the case to federal court in Illinois.
Posted by franchiselawblog at July 27, 2005 11:46 AM