Giordano’s franchisees sued as company seeks buyer

Filed under News digest

Giordano’s franchisees’ alleged decision to stop making royalty payments to the company and change the recipe of the famous Chicago-style pizza has drawn a lawsuit against them, according to a Wall Street Journal blogpost

Most of the company’s 35 franchise owners have joined forces in a $30 million bid to buy the assets of the restaurant chain, which has filed for chapter 11 bankruptcy protection and is seeking a buyer, the Journal reported. But bankruptcy trustee Philip Martino said the franchisees’ bid for the company falls short of other informal offers it has received and he is accusing the franchisees of conspiring to block a sale to an outside buyer. A lawsuit that Martino filed July 27 suggests the franchisees are damaging the company’s reputation by changing the restaurant’s pizza recipe and failing to make royalty payments that generally add up to about $2 million a year, the Journal reported. An attorney for the franchisees said they intend to work toward a favorable outcome for the restaurant and franchise owners, the story said.

Read more here: http://blogs.wsj.com/bankruptcy/2011/07/28/giordanos-trustee-accuses-franchise-owners-of-conspiracy/

 

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