Blimpie Faces Lawsuit Alleging Mismanagement
In a
lawsuit filed in Bridgeport, CT on September 15, 45 subfranchisors accused Blimpie, the sandwich shop franchisor, of misappropriating advertising funds and marketing fees. The subfranchisors also allege that Blimpie withheld their share of initial and continuing franchise fees. The suit seeks a declaratory judgment, an accounting and the appointment of a receiver. The subfranchisors also filed a motion to appoint a receiver pendente lite. The companies allege that Blimpie recently cited financial challenges as the basis for failing to send the July payments to the subfranchisors. Blimpie, based in Atlanta, GA, has not yet responded to the complaint, but is facing a
class action arbitration from its franchisees filed in July 2004.
Posted by franchiselawblog at September 27, 2005 01:47 PM