Dagwood’s Is A Fraud, Franchisees Say

TAMPA (CN) - Armed with nothing more than the rights to exploit the name "Dagwood," Dagwood's Sandwich Shoppes, a franchisor, built its entire business upon fraud, 15 plaintiffs claim in Federal Court. "Fraud was the dominant trait for Dagwood's from the moment it was conceived," the complaint states "... [from] the formation of the company, then to its opening, then to the raising of private funds, then to its sham operation of the system, then to its embezzlement of franchisee payments, then to its shady kickbacks to suppliers, then to its deliberate concealment of wrongdoing, then to the cooking of its books, and ultimately to its final declaration of bankruptcy."

The complaint continues: "Every penny invested into the fraudulent scheme by Plaintiffs - each of whom was a Dagwood's 'Market Partner,' and each of whom was individually defrauded into funding Dagwood's fraudulent scheme - has disappeared. Every fraudulently induce penny has, by means of the most sinister forms of deception, made its way from the savings accounts and IRAs of Plaintiffs into the coffers of Dagwood's and its officers. Not only have Plaintiffs' life savings magically vanished, but many of the Defendants - in a fashion remnant (sic - recte: reminiscent) of a wicked witch - have faded into the night with their loot. Hundreds of lives have been destroyed by the Defendants. ...

"Dagwood's never had anything to sell to its Market Partners, its franchisees or its other investors. Indeed, only a very small handful of the thousands of stores projected to open actually opened, and of the few that opened, none was ever profitable. The point bears repeating: a profitable Dagwood's restaurant has never existed. ... Dagwood's fraudulent scheme ... was based upon relentless, infectious, and boisterous marketing hype to sell a franchise system under an illusory existence."

Plaintiffs say the "Market Partners" were sold rights to "re-sell" their franchises, "to save Dagwood's the money, time, effort and research required to create a restaurant franchise system that worked while simultaneously deceiving the Market Partners that such a system existed."

Here are the defendants: Dagwood's Sandwich Shoppes LLC, Dean Young, Lamar Berry, Frank Brown, Dave Pertl, Bob Hartford, Ron Collette, Robert Myers, Bill Ryan, Lance Harris, Dagwood's Foodservice Group LLC, International Marketing Systems Inc., and Dean Young Enterprises Inc.

Plaintiffs are represented by David Walkowiak of Lutz, Fla., and Jeffrey Goldstein of Leesburg, Va.

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