Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Hotel franchisor seeks to recover fees from franchisee, (Sep 17, 2013)

By Peter Reap, J.D., LL.M.

Hotel franchisor Hawthorne Suites Franchising, Inc., has filed suit in the federal district court in Newark against its former franchisee Ajam, Inc., and four individual guarantors of the franchisee’s obligations over the franchisee’s alleged failure to pay fees owed to the franchisor under their agreement.

Hawthorne alleges that the parties entered into a license agreement for Ajam’s 96-room hotel located in Holland, Ohio, in 2008. In 2011, Ajam lost possession of the hotel to a third-party. According to Hawthorne, both prior to losing possession and since, Ajam has failed to pay outstanding recurring fees due to Hawthorne under their agreement.

Hawthorne’s four count complaint brings claims for: (1) judgment ordering Ajam to account to Hawthorne for any and all revenue derived as a result of selling guest lodging services at the hotel from the inception through the date of termination of the license agreement; (2) judgment against Ajam in the amount of $137,168 for recurring fees due and owing; (3) unjust enrichment against Ajam; and (4) judgment against the four individual guarantors for damages in the amount of the unpaid recurring fees. Hawthorne also requests interest, attorney fees, and costs of suit.

The complaint in Hawthorne Suites Franchising, Inc. v. Ajam, Inc., Civil Action No. 2:13-cv-4236, was filed September 16, 2013.

Attorneys: Bryan P. Couch (Clyde & Co. US LLP) for Hawthorne Suites Franchising, Inc.

Companies: Hawthorne Suites Franchising, Inc.; Ajam, Inc.

News: FranchisingDistribution NewJerseyNews