Franchisee and Pizza Hut Legal Battle Continues

Larry Lundy whose franchise was ranked among the 100 largest minority owned businesses in the United States in the 90s is facing storm after storm in his business.  In 1999, he was diagnosed with leukemia and while undergoing treatment, his franchise stores was mismanaged by the staff.  As he got better in 2004, things started to turn around but the following year, Hurricane Katrina delivered him a crippling blow.  He salvaged only 44 out of his 67 stores.  He lagged behind in royalty payments and other obligations and with Pizza Hut working against him, Lundy decided to sell his franchise back to the latter.  And thus began his legal battle with the franchisor. You can read more on this at

Veteran franchisee Larry Lundy has been no stranger to hardship, tragedy and setbacks in his three-decade career with Pizza Hut Inc. After being diagnosed with chronic myelogenous leukemia, his treatment for the rare cancer threw him into a spiral of bankruptcy restructuring of his 67 stores. Lundy landed on his feet, only then to be hit by Hurricanes Katrina, Rita and Gustav.

Through it all, the franchisee managed to stand firm, rebuilding his business in his native community that he loved, New Orleans.

Then came another blow. This one from his own franchisor, under the management of Yum Brands. When Pizza Hut began showing signs of wanting to take back the corporate-owned stores they originally sold Lundy, the relationship started to deteriorate. Lundy fought back tooth and nail, but finally succumbed when the franchisor took advantage of an opportunity to withdraw its guaranty on Lundy’s loans. Soon Lundy succumbed to their pressure and conceded his remaining 44-store network to Pizza Hut.

That began the legal wrangling between franchisor and franchisee in 2010. In trying to determine what value could be placed on Lundy’s business for the asset purchase agreement, all attempts at negotiations failed. Pizza Hut filed a lawsuit against Lundy on January 2, 2011. Lundy countersued. Now, the two are neck-deep in litigation, in a battle only attorneys can resolve.

The trial is now set for July 16, 2012.

Meanwhile, Larry Lundy fights on. While he has kept his leukemia at bay, Lundy has now been diagnosed with prostate cancer.

Photo by RetailByRyan95

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