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:
 
thisissue1-092914.jpg 092914

Subscribe to IBJ
  1. Here are a few candidates for this new group, "ripped from the headlines." First up, that bizzaro State Senator Brent Waltz; secondly, the unethical Todd Huston, and his contractual arrangements scheme; Finally, but not least of all, the dishonorable Eric Turner. What sayeth you Greg Zoeller?

  2. Good day. I can't hide this great testimony that take place in my life I will love everyone to know it and be partaker that is why I always place it on answer, I am Mrs,Natalie Cuttaia by name, I live in Texas, United State Of America, I want to thank (Mr.Bruce Brandon) for his kindness upon my family life. I never knew that there is still nice lender like this on internet and earth here. Just some Months Back, I was in search for a loan of $100,000,00 as I was running out of money for feeding and rent. I was scammed $6,800 Dollars and I decided not to involve my self in such business again but a Friend of my introduced me to a loan firm due to my appearance and doings. And I told him that I am not interested of any loan deal anymore but he told me that there is still a nice lender who he will recommend me to, and I made a trial and I am most grateful lucky am I today, I was given a loan amount of $100,000.00usd, by this great Company (Bruce Brandon Loan Company) managed by (Mr.Bruce Brandon) If you are in need of a genuine or legit loan or financial assistance and you can be reliable and trusted of capable of paying back at the due time of the funds I will advice you to, contact him via: ( bruce.brandon071@gmail.com ) And you will be free from scams in the internet. All thanks to Mr.Bruce Brandon You are the one who remove me and my family out of poverty. The reason why i am doing this is that, i promise Mr.Bruce Brandon that if i truly got my loan, i will advertize his company and bring customers to his company. Contact him via ( bruce.brandon071@gmail.com )for the Loan you have been looking for..

  3. Hello, We are firm Organization formed to help people in needs of helps,such as financial help. So if you are going through financial difficulty or you are in any financial mess,and you need funds to start up your own business,or you need loan to settle your debt or pay off your bills,start a nice business, or you are finding it hard to obtain capital loan from local banks,contact us today via email mrsroseberrywilkinsfunds.usa@gmail.com So do not let these opportunity pass you by because Jesus is the same yesterday, today and forever more. Please these is for serious minded and God fearing People. Your Name: Loan Amount: Loan Duration: Valid Cell Phone Number: Thanks for your understanding to your contact as we Await Regards Management Email:mrsroseberrywilkinsfunds.usa@gmail.com

  4. The question is, where could they build a new stadium? It seems in the past year, all the prime spots have been spoken for with potential projects. Maybe in the industrial wasteland area a block past Lucas Oil? I think it needs to be close to the core, if a new stadium is built.

  5. Aldi is generally a great shopping experience. Still, I'm sure YOU wouldn't want to shop there, which I consider a positive.

ADVERTISEMENT