Franchise Under Fire
Having been financially pummelled by shareholder lawsuits and an SEC investigation into its financial reporting,
Krispy Kreme now faces claims from its franchisees. Most recently, the principals of its largest franchisee
filed suit against the company, alleging that the company engaged in deceptive trade practices by defrauding them into signing personal guarantees and by billing the franchisee millions over what it represented its daily operations costs would be. The suit also alleges that Krispy Kreme misappropriated advertising funds paid by the franchisees. The lawsuit personally names Krispy Kreme former chairman and CEO Scott Livengood, as well as a number of former or existing Krispy Kreme officers. The plaintiff franchisee, Great Circle Family Foods, LLC, operates 30 Krispy Kreme franchises and services 800 wholesale accounts.
Posted by franchiselawblog at September 30, 2005 11:13 AM