NOLA franchisee hits back at Pizza Hut

Feb. 1, 2011

Pizza Hut’s trademark infringement lawsuit that erupted in early January against prolific New Orleans franchisee Lundy Enterprises LLC has been countered.

Larry Lundy has filed a counterclaim against the Yum! Brands’ owned Pizza Hut, accusing the company of stifling his profitability and squeezing him out of the market.

According to The Times-Picayune, Lundy Enterprises owned 44 Pizza Hut outlets in the New Orleans and Baton Rouge markets, all of which closed in January upon the lawsuit filing in the U.S. District Court for the Northern District of Texas in Dallas.

Lundy and his wife Marilyn, who co-owns Lundy Enterprises, claims that Pizza Hut imposed unfair credit terms, didn’t allow the introduction of new items that were available in other markets and calculated plans to take over his territories for company-owned developments.

Shortly after the Jan. 3 lawsuit was filed, Pizza Hut announced it was making a $10 million investment in the New Orleans and Baton Rouge markets. The plan entails the creation of “model markets” in partnership with the National Urban League and the Urban League of Greater New Orleans, including state-of-the-art restaurants that serve the communities. 

Lundy has owned Pizza Hut units since 1992.

Pizza Hut’s suit asks for damages of more than $75,000. The company insists Lundy Enterprises was behind on royalties and advertising fees. Arbitration was facilitated between the two parties in the summer, however a resolution fell short.

According to Pizza Hut, Lundy is on contract to assist the company with its transition for the next five years.


Topics: Franchising & Growth , Operations Management , Pizza Hut

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