IBJNews

Judge tosses Noble Roman's franchisee claims

Back to TopCommentsE-mailPrintBookmark and Share

Noble Roman's Inc. has won a pivotal courtroom victory in a battle with 14 former franchisees of its dual-branded Noble Roman’s Pizza and Tuscano’s Italian Style Subs restaurants.

The Indianapolis-based chain is pursuing a judgment of more than $3.6 million against the former franchisees after a Hamilton County judge in December tossed civil claims that the chain committed fraud.

The franchisees filed a lawsuit in June 2008, saying Noble Roman’s misled them about the costs and profit potential of the restaurants. The former franchise locations, in several states including Kentucky, Missouri and California, have since closed.

The chain argued the franchisees were entirely at fault for their own failures, thanks to “mismanagement and incompetence.” Yet the chain has acknowledged that its effort to quickly open hundreds of stand-alone, dual-branded Noble Roman’s and Tuscano’s locations did not work out as hoped.

"This has been a long and expensive lawsuit but we are pleased the court has recognized that the allegations of fraud against the company and its officers were without merit," company president A. Scott Mobley wrote in an e-mail.

The franchises were seeking more than $8 million in damages, a sum that could have left Noble Roman's insolvent. The chain, which operates in 45 states, has a market value of just $20 million. Noble Roman's shares closed at $1.05 apiece on Friday.

Hamilton County Superior Court Judge Steven R. Nation wrote that the franchisees had "no reasonable right" to rely on the chain's verbal sales pitch.

"There was an acknowledgment in the franchise agreement that plaintiff understood and acknowledged the obligation to conduct an independent investigation and the business involved a substantial risk," Nation wrote in the ruling on Dec. 23, 2010.

Noble Roman’s has reinvented itself several times over the years since launching in the 1970s as a chain of dine-in restaurants. In 1997, after intense competition and rising costs made stand-alone pizza joints difficult to operate profitably, Noble Roman’s turned to franchising and opened about 800 nontraditional outlets in locations such as convenience stores, bowling alleys and hospitals.

The chain sold about 90 dual-format franchises between 2006 and 2008 and 55 of them opened, but at least half have since closed.

“The franchisees were misled into buying a concept that was not sufficiently tested,” franchisee attorney P. Adam Davis of locally based Davis & Sarbinoff LLP told IBJ in August 2009. “They were in fact the guinea pigs. And that’s not what you buy a franchise for. The point is that you’re getting a tested and proven concept."

Davis, who took over the case after Nation revoked the temporary admission of attorney David M. Duree of Illinois, was not available to discuss the judge's ruling.

Noble Roman's latest reinvention involves a new offering of take-and-bake pizzas, pasta sauces, deep-dish lasagna and other retail products in grocery stores.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Angela IS the best RD

  2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

  3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

  4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

  5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help

ADVERTISEMENT