Noble Roman's awarded $1.5M in battle with franchisees

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Noble Roman’s Inc. is still waiting to collect about $1.5 million more than a year after scoring an apparent victory in a lengthy court battle with some of its former franchisees.

The Indianapolis-based chain had pursued a judgment of more than $3.6 million against former franchisees after a Hamilton County judge in December 2011 tossed civil claims that the chain committed fraud.

The dispute started in June 2008, when the franchisees filed suit claiming Noble Roman’s misled them about the costs and profit potential of the restaurants. The former franchises, in several states including Kentucky, Missouri and California, have since closed.

After a judge dismissed the claims, Noble Roman’s countersued against 14 franchisees, arguing that the restaurants failed to stay open for 10 years, a requirement of the franchise agreement. A dozen of those franchisees were eventually dropped from the countersuit.

A jury awarded Noble Roman’s $86,290 and $78,302, plus court costs and interest, in late 2012 against the two remaining franchisees. But Hamilton Superior Court Judge Steven Nation didn’t sign off on the verdict until last month, when he ordered the franchisees to pay additional fees of $1.1 million to the chain’s attorneys.

“The agreements required [the franchisees] to keep [their restaurants] open for a 10-year term,” said Jeffrey Gaither, an attorney for Noble Roman’s. “When they closed after a year or two years or whatever, Noble Roman’s was entitled to damages and the royalties they would have received.”

Attorneys for the franchisees argued, however, that Noble Roman’s franchise agreements do not provide for future royalties.

They asked the judge in a March 19 motion to reconsider both the jury award and the attorneys’ fees.

“We’re appealing everything,” said P. Adam Davis, a lawyer for the two former franchisees. “[The motion] gives him an opportunity to reconsider what he awarded and what he ruled on before we go to appeal.”

A hearing on the motion is set for June 17.

With the threat of an appeal looming, lawyers for Noble Roman’s have asked the court to require the former franchisees to post what’s known as an appeals bond in the amount of $1.5 million each.

“You have the right to appeal. But because the judge entered a final judgment, we could start the collection now,” Gaither said. “If you post the bond with the trial court, it says we’re not going to let Noble Roman’s seize your bank accounts. But if we win, the assets will be right there immediately for us.”

The franchises had sought more than $8 million in damages against Noble Roman, a sum that could have left Noble Roman’s insolvent had the judge not dismissed their claims.

In recent years, Noble Roman’s has begun concentrating on a take-and-bake concept similar to that of the industry-leading Papa Murphy’s chain. Pizzas in the Noble Roman’s Take-n-Bake P’ZA locations are made to order at room temperature, so customers can cook them at home.

In its latest earnings statement released March 12, Noble Roman’s said it has signed agreements for 55 stand-alone take-and-bake locations. The first of the 22 stand-alone locations operating opened in October 2012.

For the fourth quarter, the franchisor of Noble Roman's Pizza and Tuscano's Italian Style Subs said it earned $496,000, or 3 cents per share, compared with $566,000, or 3 cents per share, in the same period in 2012.

Quarterly revenue was flat, at $1.7 million.

For the entire year, Noble Roman’s earned $2.6 million, or 14 cents per share, compared with $2 million, or 10 cents per share, in 2012.

Annual revenue increased 9.1 percent, to $7.5 million.
Shares of Noble Roman’s are thinly traded on the over-the-counter exchange and were priced at $1.40 Thursday morning.


  • Location
    I do know that there is one at 10th/Girls School Rd. Would be nice if they made ordering online. Instead, I call and pickup. Only a couple of miles away. Prices are a little steep but when my herd is hungry, I go with the Colossial and it feeds all 6.
  • 49th & Penn
    There is a carryout store at 49th & Penn. Nothing like the old ones. I worked at 86th & Ditch in late 70's. This one has a few tables but carryout is best.
  • Noble Romans
    I do miss the Noble Roman's pizza. It was by far my favorite. There use to be one last standing at 56th and Georgetown, but, that is just too far to drive for us. I wonder if it is still there.

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim