Little Caesars sues franchisees for breach of contract

May 6, 2004

DETROIT—Little Caesar Enterprises has filed a lawsuit in the U.S. District Court of Eastern Michigan accusing more than three-dozen of its franchisees of breach of contract and trademark infringement.

According to Nation's Restaurant News, the suit centers on those franchisees' use of pepperoni, cheese and pizza sauce that don't meet Little Caesars' specs.

The suit seeks to force the franchisees to use approved products only and pay unspecified damages.

Little Caesars spokesperson Laura Burgess said the company "does not comment on pending litigation."

As part of a 2001 settlement of a multifaceted franchisee lawsuit against Little Caesars (see A Fair Deal for All), franchisees were allowed to form a cooperative to purchase food ingredients from sources other than Blue Line, Little Caesars' company-owned distributor. In the class-action suit, franchisees accused Blue Line of charging high prices for the same products they could get from other distributors at much lower costs.

In 2003, the International Organization of Little Caesars Franchisees (IOLCF) formed the Advance Purchasing Cooperative (APC) (see Is Little Caesars truly rising again?) to source products through Vistar (formerly Multifoods Distribution), a move that had been approved by Little Caesars. According to September 2003 story by PizzaMarketplace, some 300 franchisees had joined the co-op, and planned to cease purchasing products from Blue Line in January 2004.

Jeff Welsh, president of the IOLCF, was unavailable to comment on the litigation.

Topics: Little Caesars

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