Red Robin Sues Franchisee

Amarillo Globe-News reports the development of a legal case between Colorado company, Red Robin International, and its Amarillo franchisee, Early Bird Amarillo and Bryan Cumby, a company principal.  The case stems from the alleged repeated failure of Early Bird and Cumby to pay franchise fees that resulted in numerous default notices and termination of the franchise agreement in January last year.  The Amarillo restaurant, court records show, was ordered to cease using Red Robin International’s trademarked and copyrighted materials in July 30.  Outside the restaurant, the exterior signs are covered with tarps but inside, the menus, seasonings, gift cards and employee uniforms still bear the Red Robin logo.  The defendants are challenging the restraining order.

A restaurant on West Interstate 40 continues to operate, at least on the inside, as a Red Robin despite a court order that it stop using the gourmet burger chain’s name and proprietary materials.

Red Robin International claims the restaurant lost its right to represent itself under the chain’s name more than 18 months ago, when the Colorado company terminated the store’s franchise agreement, according to a lawsuit filed in 320th District Court.

District Judge Don Emerson signed a temporary restraining order on July 30 mandating Early Bird Amarillo OPS4, the limited partnership that operates the store, cease its use of Red Robin International’s trademarked and copyrighted materials.

Exterior signs on the store are covered with blue tarps.

But inside the store Friday, menus and employee apparel still boasted the Red Robin logo. A large Red Robin statue graced the decor, Red Robin seasoning sat on the tables and Red Robin gift cards filled a lobby rack.

Red Robin International is suing Early Bird and Bryan Cumby, a company principal, for allegedly defaulting on the Amarillo store’s franchise agreement with the chain. The defendants have challenged the restraining order, which was issued Aug. 1.

Cumby signed a personal guarantee assuming the franchise agreement obligations in May 2010, the lawsuit claims.

The lawsuit alleges Early Bird and Cumby repeatedly failed to pay franchise fees in a timely manner, resulting in multiple default notices and the chain’s termination of the pact in January 2011, court records show.

Red Robin International claims it still had received no payments by January. The chain demanded in a Jan. 23 notice that the store stop operating as a Red Robin and in a July 20 notice that the operator “de-identify” the restaurant as a Red Robin.

A chain representative visiting July 25 discovered the demands had been ignored, the lawsuit states. The operator covered the signs July 27, according to Red Robin International’s filing.

“On July 28, 2012, Red Robin learned that the defendants had removed the tarps covering the signage, evidencing the defendants’ clear intent to willfully and wrongfully continue to use Red Robin’s marks and intellectual property,” Red Robin International alleges in the suit. …

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