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Franchisor 3 for 1 Pizza loses court case to franchisee
October 12, 2003
TORONTO -- Franchisor 3 for 1 Pizza & Wings (Canada) Inc. used a "fraudulent scheme" to acquire CAN $58,500 (U.S. $43,900) from a Barrie, Ontario, couple.
According to the Toronto Star, on Oct. 2, Justice Harry Keenan of the Ontario Superior Court of Justice ordered 3 for 1 Pizza and a related firm, Triple Holdings Ltd., to refund deposits to Tricia and Stephen Scott, plus mortgage fees and interest, for a total of $74,920.68.
In the trial, the Scotts testified they saw a newspaper advertisement for 3 for 1 franchises in 2001, met with a salesman at the company's offices and paid nearly half the price of a new location but did not receive one.
Reza Solhi, president of the two companies, testified along with his marketing manager, William Chaupiz, that the salesman was not an employee or agent of Solhi's companies, despite what his business card indicated.
They said the husband and wife were actually dealing with companies of Farzad Bagherzadeh, a franchise owner who manages the chain's telephone call center.
Bagherzadeh was not called to testify and the Scotts said they had never met him or heard of him.
Lawyer John Chidley-Hill argued that Solhi's companies had no obligation under the Arthur Wishart Act (Franchise Disclosure) 2000 to provide a package of disclosure documents to the Scotts or to refund their deposits since they had not fulfilled their part of an agreement.
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