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Benjys faces lawsuit from franchisees
BENJYS, the sandwich bars chain, is under legal attack from its own franchise operators, who allege the operation is a ' living nightmare'.
A 29-page letter addressed to Benjys' lawyers on behalf of 33 current and former franchisees of Benjys Delivered, the company's food delivery operation, is threatening legal action over a series of alleged misrepresentations.
Starting formal High Court proceedings could see the franchisees seeking damages of about £10m, say sources close to the spat.
Among the van workers' allegations are that Benjys induced people to buy into its operation with a pledge of 'ready to go customers' which 'it deliberately knew to be false or made recklessly'.
Both sides met behind closed doors in a related High Court injunction hearing yesterday over attempts by van franchisees to claw back money handed to Benjys' owners under banking agreements.
The action comes as sources at newly set-up Benjys shop franchises in London said they are considering legal action, after the collapse this week of an outlet in Paddington.
Latest published figures for Benjys' operating company show almost £3m of losses for the year to 31 March 2005, against a pre-tax profit of £263,747 a year earlier. But at group level losses widened to over £5.3m.
Chief executive Ian Rickwood said: 'Benjys Delivered continues to see fantastic growth, we have around 115 vans on the road and are currently enjoying like-forlike growth of 20%. The majority of our franchisees are enjoying success.'
Franchisees could seek damages of about £10m, say sources