Problem franchisor Dream Dinners caught again. The franchisor that has crushed the business ownership dreams of so many franchisees has, again, been caught violating franchise laws.
Janet Sparks of Blue MauMau reports that the Washington Department of Financial Institutions has obtained a "consent order" from Dream Dinners based on its solicitation of franchisees during a time when it was not registered to offer or sell franchises.
The consent order also addresses illegal earnings claims made between 2004 and 2008 as well as binding contracts it required franchisees to sign before providing a copy of the franchise disclosure document.
Dream Dinners recently mailed copies of the consent order to every current and former Dream Dinners franchisee. The State of Washington required that mailing to inform each of those investors that their rights might have been violated.
Although neither the order nor the accompanying cover letter addresses it, the order has a huge impact on every current and former franchisee. It very clearly starts their statute of limitations running. As a practical matter, that means that, at the outside, each franchisee must file a lawsuit no more than three years after the day they received the letter--or they will be forever barred from making a claim based on the violations described in the order.
This assumes that Washington law will apply. If the franchisee is located in another state or has a contract that specifies the law of another state, the time period could be shorter. Depending upon what the franchisee already knew about the facts described in the order, the period might be a lot shorter--or it may already be too late.
Any person who purchased a Dream Dinners franchise at any time up until October 18, 2012 has an urgent need to consult with qualified and experienced franchisee counsel. They should not let the holidays or any other events distract them from obtaining a review of their facts to determine what their options might be. Any delay could be fatal to their ability to recover part of what they lost on their dream-destroying adventure in franchise ownership.
Unfortunately, Dream Dinners again finds itself as the poster child of bad franchisors. It is a franchisor that appears to have no moral compass. Having received the great honor of being number 5 on the Small Business Administration's 2011 list of franchises with the highest percentage of loan defaults, having been sued before based on some of the same issues raised in the consent order, it is a company whose owners and management obviously do not learn from their experiences.
Anyone now considering investing in a Dream Dinners franchise should think long and hard and consult with experienced franchisee counsel before signing a contract or writing a check.
To read Janet Sparks' article in Blue MauMau, click here.
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