Jesús de Jesús Sánchez, judge of the Education Court number 52 in Madrid, filed a complaint against Restalia by a minority group of former franchisees and found no evidence of guilt without summoning any of the defendants to testify.who were never part of the case.
By vehicle that Servimedi has access toa, the claim in question is frivolous and should go to civil action if they want to. It also explains that, according to its criteria, the competition will remain in its own court, not the National Court, as requested by the complainants’ lawyers.
The lawsuit made the splash in the media last June, a year after it was filed. Complaints of 31 franchisors became clear (more than 700 in total) Against Restalia, several of its subsidiaries and its directors. They were allegedly reported from criminal organization, fraud, algebra, and computer crimes, from the company’s fraudulent act until it leads them to financial ruin. they provided them with unrealistic feasibility studies and “deliberately concealed from franchisees the existence of agreements with suppliers, which in short meant that the franchise would be unenforceable”. The initial amount claimed by the complainants for the alleged fraud is 20 million euros, according to the statements of the parties concerned.
Among the keys of this reason’s file denial that a fraud can be imputed on the basis that the franchisee must have certain prices or acquire certain products because they are part of the franchise model itself and belong to a chain. There is no fraudulent charge for contracts between Restalia and suppliers, because “it is as if a supermarket is cheating by not telling the customer how much he paid his supplier for that product.”
The operation of the proceedings at the 52nd Investigation Court, which has been investigating the facts for nearly two years, consisted of requesting an expert report on the agreements signed between the parties and the basic economic dimensions of the reports submitted by the complainants. This report reached the Court last November and reflects serious shortcomings in the expert reports provided by the complainants; What is most striking is that the impact that the pandemic may have had on the businesses of the complainants was not taken into account, to their intuition. intent to hold the franchisor responsible for the economic consequences of this extraordinary event on its premises.
The Judge explains at his disposal that the estimates made by Restalia are estimates and in no case guarantee any financial return under the franchise agreement; that the franchisee manages its business autonomously and therefore assumes the risk that this entails.
In addition, the uniformity of the chain inherent in the franchise indicates that the obligation to purchase approved products according to taste, quality and service criteria is clearly included in the franchise agreement.
Restalia stated that “the accusations made in the complaint are unfounded and have always maintained that the intent was to damage the reputation and business of a company affiliated with their franchises”. “The case file—they point out—confirms that neither Restalia nor any of its directors has committed any crime, always acting in full compliance with the law.”.
They also emphasize that they were never involved in the process and were not called to testify: “None of the group companies, their employees and/or managers were involved in the alleged legal proceedings or received any court notice. That’s why they think they’re in a vulnerable position.”
Likewise, they undertake to take the actions they deem appropriate to compensate for the damages that may arise from this “smear campaign”.
The company also “22 years of experience providing entrepreneurial opportunities through a working business formula, as demonstrated by the extensive network of stores operating under its five brands, both national and international.”, in a sector such as organized catering, which currently represents more than 31% of the food services market and employs more than 200,000 people in our country. And they add: “The growth of the group has been sustained since its inception, it has since overcome all crises and is now Spain’s largest organized restaurant company at a national level.”
The Restalia lawsuit is not the first criminal case franchisees have brought against franchisors that has so far been unsuccessful.
Very similar It was the Granier case, The bakery chain accused of the same crimes and almost the same facts as Restalia. The file was first archived in 2018, but the Provincial Court reopened it and it was reopened in 2020, upon the unobjectionable statement of the administrators.
McDonalds lawsuit started in 2016, the company that distributes the products of the American fast food company and was sued by the Investigation Court No. 2012. Madrid’s 17th decision was upheld by the State Court, as it did not present criminal evidence. What is striking and very unusual about this case is that Cremades Calvo Sotelo, realizing that the decision to sue was manifestly unfair, sued the investigating judges and the Supreme Court for judicial bias. The Madrid High Court of Justice filed a complaint against the judges in November 2019.
Complaints about chains Dia and Carrefour supermarkets they are diverse. Common sense varies widely, but the most common crimes it tries to turn are fraud (to fail to meet the billing estimates delivered to franchisees when economic works are delivered) or coercion (due to cutbacks). computer supplies due to non-payment of monthly royalties). Finally all archived
Burger King, Tecnocasa, Mailboxes and other chains Also, franchisors initiated (fraud, coercion due to supply interruptions, etc.)
The key to successive filings and previous decisions lies in the disclosure that the franchisee is an independent businessman who has to manage his own business and therefore bears the risks of any business, including a pandemic. It is worth noting that in many cases we have mentioned, the option of resorting to such criminal proceedings instead of resorting to civil action in resolving disputes that may arise between brands and franchisees is criticized.
While current disputes between franchisors and franchisors often create a media effect due to their brand recognition, the Spanish Franchise Association warns of the low litigation rate (0.09%), which suggests that franchise industry franchising is far less confrontational than it is. is showing. may appear from such news.
For this reason, and according to similar lawsuits, it is expected that the complainants will object to the filing of this lawsuit, thus facing a long process that exceeds five years. The appeal can be made to the court itself (reform appeal) or to the Provincial Court (objection appeal).
According to legal sources consulted, the logical course of action is for them to appeal to the court itself and appeal to the State Court after the court upholds the filing decision, which would mean continuing to prolong the process. If an appeal is made for the reform, it will be referred to the parties and the prosecutor’s office, the Madrid court will resolve the issue within two months at best. However, if the appeal is referred to the Provincial Court or another body, it may take more than five years for the decision to be rendered.
James Sean is a writer for “Social Bites”. He covers a wide range of topics, bringing the latest news and developments to his readers. With a keen sense of what’s important and a passion for writing, James delivers unique and insightful articles that keep his readers informed and engaged.