An Aside: Primer On Protecting Franchisors From Liability For Alleged Misrepresentations and Omissions
In April 2007, six Quizno's franchisees filed a class action in federal court in Chicago against the franchisor, related entities, and some individuals. Quizno's is a fast-food, toasted sandwich restaurateur. The plaintiffs alleged that they had been the victims of RICO, antitrust, and other statutory violations, as well as common law causes of action, in connection with Quizno's franchise agreement. Significantly, they claimed that they became franchisees as a result of various oral misrepresentations and material omissions.
The district court dismissed the federal law counts for failure to state justiciable causes of action. Siemer v. Quizno's Franchise Co. LLC, No. 07 C 2170 (N.D. Ill., Mar. 31, 2008) (Pallmeyer, J.), relying in large part on Westerfield v. Quizno's Franchise Co., 527 F. Supp. 2d 840 (E.D. Wis. 2007) (Griesbach, J.). Judge Pallmeyer's 18-page Memorandum Opinion and Order details the disclaimer and warning provisions of Quizno's Uniform Franchise Offering Circular as well as the franchise agreement included within the Offering Circular, which protect the franchisor from liability for alleged misrepresentations and omissions. In this regard, the decision in Siemer is recommended reading for (a) attorneys defending franchisors against claims similar to those made by the franchisees in this case, and (b) draftspersons of such documents regarding how to minimize exposure to those claims.
