Janet Sparks reports at BlueMauMau Papa John’s International is defending itself against a lawsuit brought by the purchaser of 84 underperforming franchises, Essential Pizza, Inc. The franchises are a multi-million dollar acquisition between Blackstreet Capital Management and Essential Pizza.
Essential Pizza claims the franchisor failed to disclose significant tax expense and liability in the amount of $1.2 million when preparing financial documentation for the sale. The multi-unit franchisee alleges there was also additional liabilities that should have been disclosed including “the crippling burden of fighting extensive class action litigation” by Papa John’s delivery drivers. He states, “Papa John’s negligently opened itself and its franchisees up to liability for wage violations related to complying with minimum wage laws” with its policy of charging a set “delivery fee” to customers for every delivery.
Read more at: BlueMauMau