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  4.  » Iconic burger chain involved in lawsuit with former franchisee

Bud’s Broiler is perhaps the oldest local burger chain in New Orleans. The owner of the franchise, Bud’s Broiler Holdings, is now involved in litigation with the franchisee who ran the oldest location in the city on City Park Avenue. A franchise in Baton Rouge owned by the same franchisee also closed recently.

The basis of the dispute is a claim by the franchisee, Shannon Prince, that the Bud’s Holdings violated the franchise agreement by mismanaging business and opening two competing locations that are in her territory. The complaint also alleged that the franchisor made false and misleading statements in persuading her to open the restaurant in Baton Rouge. In response, Bud’s accused the franchisee of purchasing meat from other companies and trying to create her own recipe for the brand’s smoky flavored hickory sauce.

A Civil District judge recently granted the franchisor’s motion for a preliminary injunction barring the franchisee from using the Bud’s name or operating a competing business. A “Sorry we’re closed” sign appeared on the door of the City Park Avenue restaurant, and a “For Lease” sign soon afterward. The court battle appears to be far from over. The parties in cases such as this one often prefer to complete discovery before beginning serious settlement discussion.

Franchise agreements can be the source of frequent conflict if they have not been carefully drafted or reviewed by a lawyer before they are executed. Anyone considering opening a franchise business outlet may wish to get more information about business law options.