The Tilted Kilt Pub & Eatery, a popular bar/restaurant chain, is involved in commercial litigation with one of its franchise developers that alleges the Tilted Kilt is no longer living up to its contractual duties.
The legal battle began in November 2015, when Tilted Kilt sued 1220 LLC, a Chicago area developer for Tilted Kilt. 1220 LLC consists of four brothers, the Baroud brothers – Robert, Emil, Anthony and Peter. In 2007, the brothers entered into an area developer agreement with the Tilted Kilt, agreeing to sell and develop franchises in Northern Illinois, Southern Wisconsin and Northwest Indiana in exchange for revenue that would be generated by franchise fees.
Tilted Kilt’s Allegations
In its lawsuit, Tilted Kilt alleges that in 2009, the developers from 1220 LLC met with prospective franchise owners and told them that franchised Tilted Kilt restaurants generated revenues of $2.5 million dollars annually, which is a misrepresentation according to the complaint. The prospective business owners then entered into an agreement to establish three Tilted Kilts in Kenosha, Wisconsin; Vernon Hills, Illinois; and Gurnee, Illinois. However, the franchises did not generate the profits projected by the Baroud brothers. In fact, the Kenosha location sustained significant losses. All three locations have since closed.
Tilted Kilt has asked the court permission to terminate its agreement with 1220 for unlawfully misrepresenting the company’s financial performance.
Recently, 1220 filed a countersuit against Tilted Kilt, alleging that the company had failed to meet its contractual obligations. The suit alleges that Tilted Kilt abused vendor rebates, failed to develop and implement effective marketing and made unreasonable business decisions in bad-faith that cut into 1220’s profits. The brothers are seeking $20 million in damages.
The suit also alleges that Tilted Kilt had been trying to terminate their contract with 1220 for years because they wanted to acquire 1220’s stream of revenue.
Philadelphia Business Lawyers at Sidkoff, Pincus & Green Represent Businesses That Have Been Harmed by Acts of Bad Faith
If your business has been harmed by bad faith acts, such as an intentional misrepresentation that induced you to enter into an unfavorable contract, our skilled Philadelphia business litigation lawyers at Sidkoff, Pincus & Green are prepared to help you get justice and will pursue a bad faith lawsuit in Philadelphia on your behalf. With offices conveniently located in Philadelphia, we represent businesses throughout Philadelphia and South Jersey. To schedule a consultation, call us at 215-574-0600 or fill out our online contact form today.