May 23, 2006
Trouble In The Den
Bear Rock Franchise Systems Inc., franchisors of the “quick-casual” restaurant concept Bear Rock Cafe, is facing two lawsuits in Wake County, North Carolina Superior Court. The first lawsuit, filed by Alabama franchisees Thomas and Julie Nicholson, alleges that Bear Rock and its CEO Gary Bryant provided them with intentionally or negligently misleading and false representations about owning and operating a Bear Rock franchise. The franchisees entered into an agreement in April 2002 and eventually closed their restaurant in May 2005. They contend that, despite Bear Rock’s projections on earnings, they lost money. In addition to the fraudulent and negligent misrepresentation claims, the complaint alleges breach of contract and unfair and deceptive trade practices.
In the second lawsuit, Merles Inc., owner of a Bear Rock Cafe franchise in Charlotte, NC, is claiming breach of contract and unjust enrichment by Bear Rock. Apparently, Bear Rock agreed to take over the management duties of Merles’ restaurant. Merles alleges that Bear Rock failed to manage and operate the restaurant "in a first class manner," which ultimately led to the cafe going out of business.
Posted by franchiselawblog at May 23, 2006 03:35 PM