Pinkberry 'Zee Names Starbucks CEO in Lawsuit
The Florida stockbroker turned Pinkberry franchisee is getting personal in his claims against the frozen-yogurt franchisor, naming the CEO of Starbucks, Howard Schultz, and the CEO of Pinkberry, Ron Graves, and two other former Pinkberry executives in a lawsuit alleging fraud filed August 29.
Sam Lewis owned four Pinkberry stores via his company, Penninsular Group, which performed so poorly he filed for Chapter 11 bankruptcy protection within the past month, according to his attorney, Alejandro Brito, with Zarco Einhorn Salkowski & Brito in Miami.
“It’s a claim to go after these individuals personally, because under the law we have the right,” said Brito, about Penninsular Group v. Howard Schultz, Ron Graves, Michael Dixon and Michael Beck. “We have some serious concerns as to the collectability of our claims against Pinkberry. It’s not a financially stable company. It’s not healthy in any respect.”
Lewis has already gone several rounds with Pinkberry. He stopped paying royalties in September 2012 and Pinkberry sued. He then filed a counterclaim against Pinkberry, alleging fraud, and sought to depose Schultz. Schultz was an early investor in Pinkberry via his venture fund called Maveron, and Lewis claims Schultz’s involvement was touted to attract him and other franchisees to buy.
Although Schultz remains on the board of Pinkberry, Lewis claims Schultz has not been involved in the company’s management or strategic direction, and instead named Graves as CEO, whom Lewis believes is incompetent.
“They were essentially holding the system out to be something that was fresh, new, growing and vibrant, when they knew at the time the system was actually suffering serious losses, and as a result continued to suffer serious losses on an annual basis,” Brito says.
Jennifer Brockett, attorney with Davis Wright Tremaine in Los Angeles and Pinkberry’s outside counsel, didn’t immediately reply to a request for comment. For an article in Franchise Times’ June/July issue about Pinkberry’s lawsuit against Lewis and his counterclaim, she wrote in part:
“A review of FDDs across the frozen yogurt category will show that Pinkberry has been and continues to be the category leader. Pinkberry has among the highest if not the highest average unit volumes in the segment, and has grown to over 250 stores across 20 countries in the past seven years.”
She added at that time: “Mr. Schultz has been a valued board member to Pinkberry. The defendants have no basis for seeking to involve him in this litigation.”