Domino's Pizza franchisees may settle ''free delivery' lawsuit with $21 M in coupons

May 2, 2004

ST LOUIS—Two Domino's Pizza franchisees in Missouri being sued by a group claiming the stores' "free delivery" offering was falsely advertised may settle the suit by offering patrons nearly $21 million in coupons.

According to the St. Louis Business Journal, attorneys for a handful of plaintiffs filed suit in November 2001 against Domino's franchisees MBR Management Corp. and Central Missouri Pizza Inc. The lawsuit alleges the franchisees advertised their delivery was free, but that carryout prices for the same products were lower. The report stated that large one-topping pizzas were sold at a carryout cost of $6.99, but that the same pies cost $12.01 delivered.

The franchisees denied the allegations.

A proposed settlement reached on April 12 could address the matter by forcing franchisees to provide 3.1 million potentially affected customers $20.8 million worth of discount pizza coupons. The suit also would pay $50,000 toward fees for plaintiffs' attorneys.

Additionally, the Domino's franchisees also could no longer advertise free delivery if they charged less for carryout, and they would be required to provide disclosure statements about delivery fees on advertisements and tell phone-in customers that they may be charged a delivery fee.

Judge Michael Calvin gave preliminary approval to the settlement, with a final hearing scheduled for early June.

Should the settlement gain final approval, coupons for large, single-topping, hand-tossed or original pizzas will run in the Sunday editions of the St. Louis Post-Dispatch for four weeks beginning Aug. 7.

Topics: Domino's Pizza

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