OAKLAND, Calif. (CN) – Jani-King deceived hundreds of people into buying janitorial franchises at exorbitant prices, knowing they would be unable to cover the costs, according to a class action in Alameda County Court. The class’s attorney says Jani-King targeted poor people in the Bay Area who speak Spanish.
Plaintiffs Alejandro and Maria Juarez say they and others paid up to $10,000 franchise fees based on Jani-King’s misrepresentation that they would earn $3,000 a month.
The Juarezes say negotiations were conducted in Spanish but the 40-page contract was written in English and contained “misleading language, misleading section headings, and provisions which purport to waive significant rights buried deep within the small print.”
The Juarezes say they worked more than 40 hours per week, but their income was negligible after Jani-King charged “royalty fees, account fees, franchise fee payments, finder’s fees, advertising fees, lease fees, insurance, charge back fees and charge back insurance fees.”
The complaint adds: “These fees are oppressive, unconscionable and illegal.”
The Juarezes say they actually lost money. “They were basically paying Jani-King for a job,” said co-counsel Whitney Huston.
Although Jani-King was supposed to provide franchisees with janitorial accounts, it often took accounts away from franchisees under the pretense of a client complaint, or so underbid accounts that franchisees were unable to complete assignments for any profit, the complaint states.
Huston likened Jani-King’s methods to that of predatory mortgage lenders, who use high-pressure sales tactics and confusing contracts and do not disclose important information.
Huston said Jani-King targeted low-income workers in the Bay Area who primarily spoke Spanish.
It wasn’t difficult to get franchisees to come forward with their horror stories, said Huston.
“Once people seemed to hear about lawyers looking into Jani-King they were eager to talk. All seemed to have had similar experiences,” Huston said.
Some spoke of visiting a Jani-King branch office to file complaints, only to find other franchisees crying in the lobby.
“Jani-King makes representations and omits material information about what being a franchise owner means,” said co-counsel Jennifer Reisch.
“Essentially the stories are all typical. They’re like Mr. and Mrs. Juarez, who saw it as an opportunity to have more steady income. This whole scheme seems to target people who have very little or no background being in business for themselves. A lot of people put up their entire life savings for this dream and they were fooled.”
Three similar class actions are pending in Pennsylvania, Massachusetts, and Minnesota, Reisch said.
The class in this case, consisting of the 191 franchisees in the Bay Area and 804 in California who paid for franchises and performed janitorial work, demands rescission of contracts, restitution and punitive damages for fraud and California Labor Code violations.
Shannon Liss-Riordan of Lichten & Liss-Riordan in Boston represents plaintiffs in the class actions in Massachusetts and Pennsylvania.