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Soon, they gained control and ownership of the business — unfairly, according to a 1998 lawsuit by Atlanta Bread’s founders, Robert and Richard Auffenberg. The company settled the lawsuit with the Auffenbergs in 1999 by agreeing to pay millions of dollars in royalties over a 15-year period. (Source: www.ajc.com)
There are a lot of types of bread out there, each with its own features and advantages. Baskin-Robbins has a list of 43 different types of bread on its website as an example. However, some of the most popular types of bread are those from major brands such as Wonder, Famous Amos, and French Toast.
Typically, would-be small business owners who don’t want to launch a business on their own become franchisees. They pay companies like Atlanta Bread an up-front franchise fee to use the franchise company’s trademarks and expertise, and borrow or invest their own money to open an outlet. They must run the outlet according to the franchise company’s specifications and pay an ongoing percentage of their sales to operate, or risk being “terminated,” or forced to close or give up the business to the franchise company.
In 1999, Atlanta Bread Company was among the fastest-growing franchises in the United States, with plans to rapidly double its number of restaurant locations. That year, the Couvaras brothers settled a lawsuit filed by the Auffenbergs the previous year which alleged that they unfairly gained control and ownership of the business. The settlement required that the Couvaras brothers pay the Auffenbergs millions of dollars in royalties over the next 15 years. (Source: en.wikipedia.org)
In November 2004, Jerry and Basil Couvaras pleaded guilty to a banking violation and agreed to pay fines, while remaining fraud charges against them were dismissed. Jerry Couvaras said, "It was disappointing when it happened because we felt we had not done anything wrong. Unfortunately we had to plead to something. We felt the fine would be the quickest way to get back to doing our business." Company officials stated that the charges were related to a decade-old lawsuit that had previously been settled; Jerry Couvaras further stated, "I think people can really see through what's happened here. People can see what this was really about. I think it was really old animosity."
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