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13 Plaintiffs Settle Cases Against Quiznos


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“Vindication. It’s vindication,” says Ric Cohen, partner at Cheng Cohen in Chicago, when reporting last week that lawsuits once numbering as many as 13 against Quiznos have been settled, ending litigation that began in 2006 and included a class-action settlement.

Franchise Times has yet to hear from the plaintiffs’ side, including a case called Avengers Inc. vs. Quiznos et al. plus 12 more, and represented by Jeff Springer of Springer & Steinberg in Denver.

But Cohen tells his side of the story this way. A few weeks ago Cohen got a call from the plaintiffs’ lawyers, who wanted to settle for “millions of dollars,” Cohen said. “And I said no, we’re not going to settle; we’ll try the case. However, we might consider settling for not a penny.”

Throughout the case plaintiffs had been concerned about counterclaims for damages in the event they close the stores. “I told them we might consider settling for no payment, but agreeing not to enforce the liquidated damage provisions.” The plaintiffs said no, according to Cohen.

“So the battle went down, and a couple of weeks later they said we’re prepared to do that deal now if you’re prepared to do it. And we were,” Cohen says.

A key break in the case came when Cheng Cohen returned to the judge who presided over the Quiznos class-action settlement of 2010. “Her ruling was there could be no claim going forward for anybody who was a part of the class for anything having to do with food product and distribution,” Cohen says.

“In a nutshell, it seems like Quiznos is pretty much done with litigation over product distribution for good,” Cohen says.

“It’s been a 10-year process, and in those 10 years there has never been an adverse ruling against Quiznos. It’s been defending baseless litigation and it’s taken its toll on the company. It shows what bad litigation can do to a very good company.”

Quiznos is in poor financial shape, with rumors circling it will file for bankruptcy protection. Fitch Ratings said last week the Quiznos situation underscores the problems faced by “highly levered restaurant chains with a dysfunctional franchise system.”

Cohen had no comment on that. But he noted these cases have been ongoing for more than eight years. “What will I do with myself now?” he quipped in an email.

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
 
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
 
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
 
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at
 twitter.com/mlarson1011.
 

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