Domino's Franchisees Seek Delivery From Papa John's

Posted on July 5, 2006 by Adam J. Siegelheim
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Some Domino’s franchisees have asserted that Domino’s has acted unreasonably in forcing its franchisees to purchase an “exorbitantly expensive” point of sale system that is defective and flawed and designed to collect information that Domino’s “misappropriates” for its own use. In Bores, et al. v. Dominos Pizza LLC, No. 05-cv-2498 (D. Minn. 2005), three Domino’s franchisees, owning twenty-five locations between them, have alleged that Domino’s is requiring its franchisees to purchase point-of-sale systems from restricted sources at uncompetitive pricing, through the unfair and unreasonable pricing of the system in order to make a significant profit.

To prove their case, the franchisees have subpoenaed the deposition testimony of Papa John’s corporate representative to obtain information about Papa John’s point-of-sale system. The Louisville, Kentucky based Papa John’s immediately filed a motion in Kentucky federal court to quash the subpoena. Papa John’s motion papers asserted that if forced to provide deposition testimony in a dispute between Domino’s and its franchisees, it would be providing its biggest competitor with trade secrets and other confidential information about its system. Papa John’s further argued that the Domino’s franchisees have not demonstrated any substantial need that would justify compelling Papa John’s from disclosing its point-of-sale processes. At this time, neither Domino’s nor its franchisees have filed opposition papers to this motion. 

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Comments (2) Read through and enter the discussion with the form at the end
ron balow - July 18, 2006 4:05 PM

Was there a case in N.J. of Franchisees vs. Franchisor over a cap limit on weekly fees paid.The ruling was after a certain $ amount the Franchisees received no benefit.

Adam Siegelheim - August 25, 2006 2:27 PM

I am not aware of any New Jersey decisions which capped the amount of franchise fees required to be paid to the franchisor. There is a possibility that if a court did make such a ruling, it did not publish the decision.

In any event, should you wish to discuss this further, please do not hesitate to contact me.

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