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Freshslice Pizza sues former franchisees for breaking agreements

Suit clams franchisees ignored non-competition and non-solicitation clauses in opening competing outlets across Metro Vancouver
Freshslice Pizza has expanded to 85 locations in Canada. | Freshslice Pizza

The group of companies behind the ubiquitous Freshslice pizza chain is suing a pair of franchisees for allegedly going rogue and rebranding several locations, wrongfully using confidential information to set up competing pizza-by-the-slice restaurants under the names Yummy Slice and HellCrust Pizza.

The Fresh Slice group, made up of JM Food Service Ltd., RF Franchising Inc. and RFSP Equipment & Operating Inc., filed two notices of civil claim in BC Supreme Court on July 26. One suit names Theepan Food Industry Ltd. and several others behind Yummy Slice Pizza, while the other names Jaskirat Singh, three numbered companies and HellCrust Pizza Co. Ltd. as defendants.

According to the claims, Freshslice has developed its franchise system over the last 21 years, growing to more than 85 locations across Canada.

“Distinguishing features of the system include trade secrets, bespoke intellectual property, know-how, training, and operating manuals, equipment, supplier and vendor lists, management programs, recipes and other proprietary information not made available to the public,” the claims state.

According to the claim against Yummy Slice, Freshslice inked several franchise agreements between 2011 and 2020 with the defendants for locations on Commercial Drive, East Broadway, Grandview Highway and Victoria Drive and two restaurants in Richmond. The agreements all contained non-competition and non-solicitation clauses, but Freshslice claims the franchisee registered Yummy Slice Pizza as a sole proprietorship in April 2021, soon after rebranding the locations under the Yummy Slice name. In addition, the defendants allegedly copied “extensively” from Freshslice’s website to launch the competing firm’s online presence before purporting to terminate the franchise agreements by letter in June 2021.

“The timing of the rebranding and the purported termination of the Franchise Agreements, and the secretive operation of ‘Yummy Slice Pizza’ while the Franchise Agreements were still in effect, was high-handed and oppressive,” the claim states, adding that these actions have “injured Freshslice’s business and reputation.”

Freshslice’s other lawsuit against HellCrust Pizza makes nearly identical allegations, claiming franchise agreements made with defendant Singh between 2014 and 2020 secured three locations, one on Kingsway in Vancouver, one on Robson Street and another in Maple Ridge.

“HellCrust is an alter ego of Jaskirat Singh and was incorporated to avoid the restrictive covenants in the Franchise Agreements,” the claim states.

Moreover, Freshslice claims HellCrust bought the assets of GDS Foods in May 2021, another franchisee that had operated on Hastings Street and was granted a licence to operate under the HellCrust banner.

“The Hastings Franchise struggled, less than a year after it opened, GDS Foods effectively abandoned the Hastings Franchise by ceasing to operate the business and keeping it closed,” the claim states.

The Fresh Slice group seeks damages for breaches of the franchise agreements and injunctions to restrain the defendants from operating Yummy Slice and HellCrust Pizza restaurants at the former Freshslice locations. The allegations have not been tested or proven in court, and the defendants had not responded to the lawsuits by press time.