Three former Jugo Juice franchisees are suing the Ontario-based smoothie vendor for allegedly misrepresenting the business case for Jugo Juice locations in Canada Line stations.
In their lawsuit filed August 1, Angela Zhu, De Hong Zhu and Xiao Yan Guan allege that in 2009, a representative of Jugo Juice, Jerry Bleet, offered them an "exclusive" opportunity to operate two franchises located at Canada Line stations.
The plaintiffs claim that in an April 2009 meeting, Bleet and his daughter, Tamara Bleet, told Angela Zhu that:
Jugo Juice had conducted a thorough investigation of the business viability of operating a franchise at Canada Line stations;
commuters would be able to consume beverages while travelling on the train;
Jugo Juice franchises would be the only businesses selling food or drinks in the stations along the Canada Line system;
the franchises would be located outside of the fare-paid zone; and
their employees would be able to travel between the two franchises on the Canada Line for free.
Based on that information, the Zhus and Guan entered into franchise agreements, according to the claim. They allege that Jerry Bleet told Angela Zhu she would have to sign the agreement within three days and that there was no time for her to review the agreements with a lawyer.
As the company Red Gate Holdings Inc., the Zhus and Guan operated two Jugo Juice franchises at King Edward and Oakridge stations on the Canada Line between 2009 and 2013.
The Zhus and Guan claim that, contrary to what Bleet had told them, Canada Line operator InTransit BC intended to prohibit food and drink on the train, other businesses were allowed to sell food at the stations and the Jugo Juice franchises were located partially or entirely within the fare paid zone.
The Zhus and Guan claim that because the Oakridge store was partially in the fare paid zone, their employees were required to "purchase multiple Skytrain tickets to come and go from the store."
In addition, the plaintiffs claim that the cost of setting up the franchises was "far more" than the $316,000 Bleet had quoted to them.
The plaintiffs allege that their profits from running the two Jugo Juice franchises were "considerably lower" and the expenses were "considerably higher" than Bleet had told them.
The Zhus and Guan claim they have lost a substantial amount of money running the businesses. They also say they sought but did not receive any assistance from JugoJuice or from MTY Tiki Ming Enterprises, the company that bought Jugo Juice in April 2011.
In March 2013, MTY ended the franchise agreement, according to the plaintiffs.
None of the allegations has been proven in court.
No statement of defence has yet been filed.
