Quiznos has settled 12 lawsuits that had been filed in state court in Colorado. The lawsuits are said to be offshoots of a class-action matter settled by Quiznos.
This settlement ends disputes between franchises that are now defunct and Quiznos. Quiznos, which is based out of Denver, is now said to be in bankruptcy. The 12 franchises had made claims of as much as $40 million against Quiznos.
This appears to have been an ongoing dispute. Both in the class action and the lawsuit recently settled, the franchises claimed that Quiznos was gouging the owners of the franchises through misrepresentations concerning possible store sales and through what were said to be improper product mark-ups. Quiznos, on the other hand, brought a counter-suit against the franchises claiming the franchise owners had breached their contracts by abandoning these stores. Royalty payments and advertising contributions were also said to be halted by the franchises.
When high-stakes business litigation matters like this do arise, companies are often faced with a number of decisions that need to be made to allow for disputes to be remedied. Businesses are often finding themselves between a rock and a hard place in that many of the avenues they could choose may prove to be costly.
Lawsuits generally do not end up in court unless there is a great deal at risk to begin with. It is preferable to settle most matters if possible because a drawn out litigation could prove to be costly. Attorneys can advise business concerns as to what is the best approach to make certain the best possible outcome is achieved.
Source: The Denver Post, "Quiznos settles dispute with defunct franchisees," Stephanie Gleason, April 7, 2014