Franchisor Blunders, No Wonder Buyers Don’t Read FDDs

The Franchise Disclosure Document (FDD) should be seen by franchisors, their attorneys and state and federal regulators as the most valuable tool for perspective buyers prior to making their decision as to where they want to invest their money into a franchise. The 200-, 300-, or even 500-page document should contain pertinent data and financials about the system, and what protections are given to franchisees in making their investment of tens or hundreds of thousands of dollars.

When franchisors and their legal counsel get it wrong in the company's FDD, making errors, misrepresentations and omissions, it can cause turmoil, financial devastation, and costly litigation for franchisees.

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Video Coverage of CBS4 Miami Reporting on Burger & Beer Joint South Beach Location Being Forced to Close Because of Gay Nightclub

The lawyers of Hirzel Dreyfuss & Dempsey are happy to see CBS evening news in Miami covering the ongoing scandal involving our clients, the franchisee owners of the former Burger & Beer Joint in South Beach.  Our clients also are franchisee owners of the locations in Mary Brickell Village, the Dolphin Mall, and in San Juan.  

Our clients' South Beach location was forced to shut down after the parent Franchisor entity terminated the franchise agreement due to a gay bar called "The Mix" being allowed to operate after-hours on the second floor of our clients' premises.  The parent Franchisor entity informed our clients that the gay bar could negatively impact the B&B brand.

Our clients and our firm strongly oppose such discriminatory tactics and sentiments against the gay, lesbian, bisexual, and transgendered community from the parent Franchisor entity.

Video of CBS' Coverage of this Story:  http://cbsloc.al/2lgn94d  and also at https://www.youtube.com/watch?v=D0ljVAnRQqQ

The "Protect Florida Small Business Act” (SB 750) Introduced Into Florida Senate

Legislation that would protect small business owners who enter into franchise agreements was filed Tuesday in the Florida Legislature.

The attorneys at Hirzel Dreyfuss & Dempsey strongly support SB 750's protections for franchisees.  SB 750 adds reasonable and necessary protections for franchisees against harsh and abusive mistreatment by franchisors.

Read more about SB 750 here.

Link to Text of SB 750 here.

South Beach Burger & Beer Joint Loses Franchise After Gay Bar Opens Upstairs

CBS4 News in Miami continues the coverage of the forced closure of the Burger & Beer Joint location on South Beach by the parent Franchisor entity because a gay nightclub was permitted on the second floor of the location (after-hours).

Hirzel Dreyfuss & Dempsey represents the owners of the South Beach Burger & Beer Joint Location in fighting back against discrimination and against abusive franchisors.  Our clients also own the locations in Brickell, Dolphin Mall, and in other locations as well.

Read more about the story here:

http://miami.cbslocal.com/2017/02/07/south-beach-burger-beer-joint-loses-franchise-after-gay-bar-opens-upstairs/

A gay bar opens upstairs. Downstairs, Burger & Beer Joint loses its franchise.

The law firm of Hirzel Dreyfuss & Dempsey is representing franchisees who own multiple Burger & Beer Joint restaurant locations in Florida and in San Juan, Puerto Rico.  Our clients have recently had their franchise agreements terminated by the parent Franchisor company.  

The parent Franchisor company explicitly stated in a formal notice to our clients that the South Beach Burger & Beer Joint was being terminated solely because an after-hours gay nightclub was operating on the second level of the building.

We and our clients are shocked to have their restaurants placed at risk and their SoBe location forced to close.  Discrimination is not appropriate anywhere, but it is very surprising to find it on South Beach in 2017.  Our clients and the attorneys at the law firm of Hirzel Dreyfuss & Dempsey oppose discrimination against the LGBT community and hope that the parent Franchisor company will admit what they did was wrong and unacceptable.

Read more about this story from the Miami Herald:

http://www.miamiherald.com/entertainment/restaurants/article131135579.html 

 

Appeal in Multimillion-Dollar Franchisee Litigation against Nissan North America

Nissan North America's practice of providing millions of dollars in support to select dealers is at the heart of a court case in Florida.

In an appeal filed Feb. 11 in the First District Court of Appeal in Florida, South Motors Infiniti of Palmetto Bay, Fla., south of Miami, said Nissan must offer other Florida dealers the same cash the automaker is giving dealer Bernie Moreno to open an Infiniti point in Coral Gables, Fla.

Anything less violates Florida franchise law, the appeal said.

If the court agrees, it would conflict with Nissan's notion of providing money and help to select dealers and not others. The case could attract attention in other states where Nissan has been aggressively remaking its dealer network.

The appeal seeks to overturn a lower-court ruling by the State of Florida Division of Administrative Hearings that approved Nissan's awarding an open Infiniti point in Coral Gables, Fla., to Moreno.

...Continued at Automotive News (Click Here)

From Automotive News (by Jamie LaReau)

Buffalo Wild Wings Drops Litigation against Florida Franchisee

Minneapolis-based Buffalo Wild Wings has agreed to drop a legal dispute initiated by Orlando area businessman Andrew Gross, who formerly owned 10 stores in Central Florida.

Gross and the company dropped claims against each other, according to a stipulation filed Wednesday. Both parties agreed to bear their own legal costs for the suit.

Buffalo Wild Wings bought back Gross’s ten restaurants in October 2014, for $22 million. The company has alleged that Gross was supposed to build 12 stores in Central Florida but fell behind and wasn’t able to finance the final two.

Buffalo also alleged that Gross’s company didn’t properly maintain the restaurants, allowed inventory shortages, and had fewer employees per store than a contract required. Buffalo demanded about $1 million to cover the alleged damages.

...Story Continued on Orlando Sentinel

100 Montaditos Franchise Fight Is Heating Up

In the bankruptcy case of the little Spanish sandwiches, a big fight is heating up.

During a hearing last week, a federal judge said the South Florida franchise of 100 Montaditos could shut down despite the bankruptcy filing of the Spanish restaurant’s U.S. arm.

The ruling was basically a formality—the bankruptcy code might have prevented the franchisee from shutting down his operations without the judge’s approval—but it preserved the ability of franchisees and the company to take legal action against each other in the future.

And further legal action is something that franchisees are planning, said Leon Hirzel of Hirzel Dreyfuss, a lawyer for a group of current and former franchisees. Mr. Hirzel declined to provide more details on the nature of the coming action.

“The bankruptcy is an attempt to absolve liability across the Atlantic Ocean,” he said, referring to 100 Montaditos’ Spanish parent company. Mr. Hirzel says the Spanish company never adequately capitalized the U.S. spinoff, an allegation the parent firm denies.

...Story Continued via The Wall Street Journal