Perkins Seeks TRO to Close 9 Area Restaurants
YOUNGSTOWN, Ohio – Nine area Perkins restaurants could be ordered closed as soon as Wednesday depending on the outcome of an hearing on a temporary restraining order scheduled for 10 a.m. in U.S. District Court in the Western District of Tennessee.
Perkins & Marie Calender’s LLC, based in Memphis, is suing 5171 Campbells Land Co. Inc., the Pittsburgh operator of 27 Perkins Restaurant & Bakery outlets in Ohio, Pennsylvania and New York, claiming it has defaulted on license agreements and owes nearly $2.2 million in franchise fees.
The lawsuit is asking the court to “immediately shut down 26 Perkins Restaurant & Bakery locations in Pennsylvania (15), Ohio (10) and New York (1), which they acquired the rights to franchise in February 2018,” a company spokesman confirmed in an email.
A statement was released that explains why the legal action was taken:
“5171 Campbells Land Co. Inc. has been in default since April 2018 failing to pay agreed upon royalty fees, marketing contributions and transfer fees as well as failure to complete construction on multiple pending projects and uphold the standards set forth in the license agreements.
“Despite innumerable attempts to resolve the situation with the franchisee, and CLC’s repeated failure to comply, Perkins & Marie Callender’s was compelled to terminate their license agreement in early June 2019 and is now asking for the court’s assistance in closing the 26 restaurants.”
The nine Perkins restaurants operated in the region by Campbells Land Co. are in Boardman (pictured above), Austintown, Warren, Niles and Ashtabula, as well as in New Castle, Greenville, Hermitage and Grove City, Pa.
The complaint states that CLC failed to complete required reconstruction of “certain parts of the Boardman, Canton, Grove City and Austintown restaurants,” that it purchased from non-approved vendors and sold unapproved products and “specials” and that it “failed 16 quality assurances, including four failures of food safety.”
On May 17, the president and CEO of Perkins & Marie Callendar, Jeff D. Warne, sent a letter to CDC “informing them of PMC’s grave concerns regarding the Pennsylvania Bureau of Food Safety and Laboratory Services’ temporary closure of the Grove City restaurant due to a number of health and safety deficiencies, some of which related to construction that had dragged on for a year,” the lawsuit states. “The letter further detailed how the restaurant’s closure resulted in unfavorable media coverage, which raised concerns of harm to PMC’s goodwill and other Perkins restaurants in the region.”
On June 3, CLC was sent “a termination of temporary license letter for all restaurants, and on June 4 was issued a de-identification letter.” Nevertheless, the restaurants continued to operate as Perkins.
Perkins & Marie Callender’s LLC operates 371 restaurants in 32 states and five Canadian provinces. Its trademark was secured in 1958.
Campbells Land Co. is operated by William T. Kane and Kristine Kochis. The company acquired 27 Perkins restaurants last year when Unique Ventures Group LLC filed Chapter 11 bankruptcy. On the eve of the transaction’s closing, the trustee said CLC lacked sufficient cash to close the deal. “Substantial negotiations” followed, the lawsuit states, enabling the closing to take place one month later.
Campbells Land Co. could not be reached for comment. The company’s response had not been filed with the court as of this posting.
The hearing Tuesday on a request for a temporary restraining order, which would close the 26 restaurants, is before U.S. Judge John Fowlkes.
Copyright 2020 The Business Journal, Youngstown, Ohio.