What was the resolution of the lawsuits between 1 800 Packouts of Ohio, LLC and 1 800 Packouts Holdco, LLC?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
1-800-Packouts of Ohio, LLC v. 1-800-Packouts Holdco, LLC, No. CV-2019-CV-00389 (Court of Common Pleas Portage County, Ohio, filed May 15, 2019); 1-800-Packouts Holdco, LLC v. 1-800-Packouts of Ohio, LLC, and Jack Schwartz, No. 19CVE1452 (The Superior Court Of Cherokee County State Of Georgia, filed July 30, 2019).
Our franchisee, 1-800-Packouts of Ohio, LLC, filed a lawsuit against us seeking a declaratory judgment that we had breached our duties under the Akron Area Franchise Agreement and that the franchisee could review the annual unaudited statements of the Brand Fund. On July 30, 2019, we filed a lawsuit against the franchisee and Jack Schwartz alleging that they had breached the Akron Area Franchise Agreement, Cleveland Area Franchise Agreement, Akron Area Guaranty and Assumption Agreement, and Cleveland Area Guaranty and Assumption Agreement by, among other things, failing to pay all amounts due and failing to provide all necessary reports. In May 2020, we settled all claims and both lawsuits were dismissed with prejudice.
Source: Item 3 — LITIGATION (FDD page 14)
What This Means (2025 FDD)
According to 1 800 Packouts' 2025 Franchise Disclosure Document, two lawsuits between 1-800-Packouts of Ohio, LLC, a franchisee, and 1-800-Packouts Holdco, LLC, the franchisor, were settled in May 2020. The initial lawsuit was filed on May 15, 2019, by the franchisee against 1 800 Packouts, seeking a declaratory judgment alleging breach of duties under the Akron Area Franchise Agreement and the right to review the Brand Fund's annual unaudited statements.
Subsequently, on July 30, 2019, 1 800 Packouts filed a lawsuit against the franchisee and Jack Schwartz, alleging breaches of the Akron Area Franchise Agreement, Cleveland Area Franchise Agreement, Akron Area Guaranty and Assumption Agreement, and Cleveland Area Guaranty and Assumption Agreement. The franchisor's claims included failure to pay amounts due and failure to provide necessary reports.
The resolution of these legal actions occurred in May 2020 when both parties reached a settlement. As a result of the settlement, both lawsuits were dismissed with prejudice, meaning that the claims cannot be brought back to court in the future. This indicates that 1 800 Packouts and its franchisee were able to resolve their disputes through negotiation and compromise, avoiding further legal proceedings.