Industry News | November 7, 2008

Five-Year Legal Battle Finally Over

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After five long years of litigation, Laguna Niguel, California-based, Parlour Enterprises Inc and Farrell’s International Inc have acquired the license and trademarks for Farrell’s Ice Cream Parlors.

Parlour Enterprises which built one Farrell’s Ice Cream Parlor franchise in Santa Clarita, California, in 2001, had entered into a development agreement in 2000 with the Kirin Group lead by Herman Chan, to build Farrell’s throughout California. Chan decided to cancel Parlour's rights in 2003 citing that Parlour owed back attorney’s fees to Kirin. The cancellation came on the heels of Parlour’s attempt to build four more Califonia locations.

Parlour Enterprises then retained attorneys Steven Smith and Robert Hadlock of Smith, Chapman and Campbell. The resulting lawsuit filed by Parlour against Kirin found the two embroiled in a three week-long trial resulting in a $6.6 million jury verdict in favor of Parlour. The verdict was then appealed by Kirin, which resulted in a substantial reduction of the judgment a year later. Parlour then pursued collection of the remaining judgment resulting in Kirin filing for bankruptcy.

Just after Parlour got its judgment, Chan sold the rights to the Farrell’s trademarks for Hawaii to the E Noa Corporation and its president, Maki Kuroda. The sale resulted in Parlour’s lawsuit against E Noa, and E Noa’s countersuit to claim those rights.

In the end, Parlour Enterprises and E Noa Corporation decided to share the rights giving E Noa Corporation rights to Farrell’s in Hawaii and Asia, and Farrell’s International securing the continental U.S. and the remaining countries throughout the world.

“It was a very tough five years,” says Paul Kramer, president of Parlour Enterprises and Farrell’s International. “But now that the fight is finally over, I feel like we got what we were entitled to and more."

According to Kramer, he and Kuroda have a very good relationship and he sees the potential for the two to even work together in the near future.

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