Former franchisees are suing Bread Garden Franchising Inc. for making what they claim are false revenue and profit representations for BG Urban Café-branded eateries in Whistler and on Davie Street in Vancouver.
Sabor Foods Ltd., 0847425 B.C. Ltd., Saeed Borhanjoo and Hamid Azani are plaintiffs who want out of contracts signed with the food chain, which has operated since 1979.
The plaintiffs claim that then-Bread Garden president Zip Dhanani said in April 2009 that annual sales for a Whistler café would be $1 million in the first year, $1.2 million in the second year and $1.3 million in the third year.
The cost of those sales would be $300,000 in the first year, $360,000 in the second year and $390,000 in the third year.
That would leave $520,000 in gross profit in the first year, $552,500 in the second year and $585,000 in the third year.
Dhanani also allegedly provided the plaintiffs with a document saying that a Davie Street location would generate $650,000 sales in the first year with progressively more sales until $850,000 in the fifth year.
He also allegedly said that that café would cost $211,250 to operate in the first year with progressively higher operating costs up to $276,250 in the fifth year. That would leave $520,000 in gross profit in the first year and progressively higher profits up to $650,000 in the fifth year.
“Bread Garden knew that the Whistler representations and the Davie representations were false when they were made, or, in the alternative, made them recklessly without regard to their truth and was negligent in making [them,]” the statement of claim reads.
The plaintiffs entered into franchise agreements and discovered that the gross profit and net operating profit for both the Whistler and Davie Street franchises were much lower than projected, according to the statement of claim.
No response to the civil claim had been filed by presstime.
None of these allegations has been proven in court.•
