AFC Enterprises Resolves Suit Against Former Franchisees

Franchisor versus franchisor civil action resolved by Pope McGlamry, a prominent Georgia law firm specializing in civil litigation, to satisfaction of corporate client.  This complex business v. business lawsuit was prosecuted by Pope McGlamry on behalf of AFC Enterprises Inc. d/b/a Popeyes Chicken & Biscuits against Cajun Operating Company d/b/a Church’s Chicken.The suit stems from Cajun Operating Company’s (COC) purchase of ten leasehold interests from CVI Company, Ltd., a Popeyes franchisee in south Texas.  Unbeknownst to AFC and in violation of its franchise agreement, CVI decided to sell its franchisee business and sought a buyer to purchase and operate the 10 Popeyes restaurants.  CVI contacted COC and other Quick Service Restaurant (QSR) operators.  COC and CVI negotiated an Asset Purchase Agreement (APA) whereby COC would purchase the 10 leasehold interests for $1.6 million.

COC’s plan was to obtain the leases then convert the restaurants to Church’s Chicken restaurants.  Pursuant to their APA, CVI closed the restaurants and 4 days later CVI and COC closed on the Asset Purchase Agreement.  As a result, COC acquired 10 new Church’s locations and AFC was eliminated from the south Texas market.  When AFC learned of COC’s acquisition of CVI’s leases, it reasoned that COC had to have known about the AFC/CVI franchise agreement and business relationship, including the contract terms, but acquired CVI’s leases anyway.

AFC hired Pope McGlamry to investigate potential claims arising from the CVI/COC transaction.  Pope McGlamry specializes in complex business litigation, including contract disputes, breach of contract, corporate misfeasance and malfeasance, and fraud.  Pope McGlamry’s investigation led to the firm filing a lawsuit against COC in Feb. 2007, AFC Enterprises, Inc., d/b/a Popeyes Chicken & Biscuits® v. Cajun Operating Company, d/b/a Church’s Chicken®, State Court of Fulton County, State of Georgia, Civil Action File No. 2007EV001961E.

In the lawsuit, Pope McGlamry claimed COC engaged in misconduct and owed AFC significant money damages under two legal theories:  Tortious interference with contractual relations and tortious interference with business relations.  In prosecuting AFC’s claims, lawyers from Pope McGlamry were involved in over 30 depositions throughout the southeast, including Georgia, Texas, Florida, and Kentucky.  After COC’s Motion for Summary Judgment was denied and on the eve of the Pre-Trial Conference, Pope McGlamry reached a compromise and settlement of AFC’s claims against COC, to AFC’s satisfaction.

In September 2009, Pope McGlamry, on behalf of AFC, filed a separate action against its former franchisee CVI and the partners of CVI, AFC Enterprises, Inc., d/b/a Popeyes Chicken & Biscuits® v. CVI Company Ltd., et al., State Court of Fulton County, State of Georgia.  The lawsuit against CVI arises out of CVI’s transaction with COC and is a breach of contract claim.  In the lawsuit, AFC claims CVI and its partners breached the terms of the franchise agreements by unilaterally closing the restaurants, ceasing operations and royalty payments, and transferring its leases to COC.  PMKM&N’s suit seeks substantial money damages, including for the loss of past and future royalty payments owed to AFC.

About Pope McGlamry

Pope McGlamry, a Georgia law firm with offices in Atlanta and Columbus, GA, is a recognized leader in the field of civil litigation. The firm specializes in wrongful death and catastrophic injury cases, particularly those involved with or motor carrier liability or products liability.  The firm is also a recognized leader in business litigation and class actions suits, especially those related to consumer issues. The firm has offices in Atlanta and Columbus, Georgia, and maintains a regional and national practice. For additional information, visit