Industry News | April 15, 2009

Tony Luke's Franchisee Sues Corporate

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On Monday, AKL Food Service LLC filed suit against Tony Luke Inc. and other entities and individuals in the Monmouth County Superior Court of New Jersey, alleging that the defendants improperly represented a Tony Luke's franchise opportunity.

Tony Luke's is a popular Philadelphia cheese-steak restaurant chain, with company-owned locations in Citizen's Bank Ball Park, home to the Philadelphia Phillies, downtown Philadelphia, and Atlantic City's Borgata Hotel & Casino.

According to the complaint, in 2005, Tony Luke's induced AKL's managing member, Anastasios Linardos, into purchasing the rights to open and operate New Jersey's first Tony Luke's franchises by grossly understating start-up and operational costs, artificially inflating sales projections, and making unlawful earnings claims.

The complaint further alleges that the defendants failed to provide AKL with the mandatory Federal Disclosure Document required by the Federal Trade Commission in connection with the sale of any franchise opportunity.

"By failing to provide AKL with a Federal Disclosure Document, the defendants flat out failed to comply with one of the most fundamental tenets of franchising," says David Paris, of Paris Ackerman & Schmierer LLP, attorneys for AKL.

"The failure to provide my client with the requisite disclosure document was not only irresponsible, but is considered to be a deceptive act in the eyes of the FTC. The failure to properly disclose AKL was exacerbated by the misrepresentations defendants made regarding the Tony Luke's franchise opportunity."

The complaint alleges that as a result of defendants' misconduct AKL has lost at least $9,000 per month in the past two years.

Ultimately, these significant monetary losses forestalled further expansion and are forcing AKL to close its Tony Luke's franchised restaurant.

The complaint charges Tony Luke Inc., TRP Management LLC, TL Enterprises LLC, Rastelli Foods Group, TR Franchise LLC, Anthony Lucidonio Sr., Anthony Lucidonio Jr., Antony Lucidonio III, Ray Rastelli, and Bill Pizzico with wrongdoing against AKL.

AKL is a New Jersey limited-liability company based in Monmouth County. AKL was formed by Anastasios Linardos and two other individuals who are no longer members of the entity.

AKL was formed for the purpose of owning, operating. and developing certain Tony Luke's franchised restaurants.

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