Industry News | September 1, 2004

AFC Files Suit Related to Accounting Problems

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AFC Enterprises, Inc., the franchisor and operator of Popeyes Chicken & Biscuits, Church's Chicken, and Cinnabon, and the franchisor of Seattle's Best Coffee in Hawaii, on military bases, and internationally, today announced it has filed a lawsuit against Arthur Andersen, LLP, two of its former partners, and a former audit manager.

The suit charges that the defendants violated generally accepted auditing standards and accounting principles, committed auditing malpractice, and breached contracts between the parties, resulting in AFC having to restate two years of financial statements and incur substantial costs, fees, and lost profits.

The suit, which was filed in the Superior Court of Fulton County, Georgia, further alleges that as a result of Arthur Andersen's negligent acts or omissions and breaches of contract, AFC is entitled to monetary damages and equitable relief from Arthur Andersen.