What was the basis of Golden Corral's lawsuit against the Scisms?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
ered and defended vigorously.
Golden Corral filed a separate lawsuit against the Scisms seeking payment of franchise fees of over $1 million dollars arising out of the Scisms' abandonment of the franchise.
Golden Corral and the Scisms cross-moved for summary judgment on June 20, 2023. On March 27, 2024, the Court granted Golden Corral's motion and dismissed all of the Scisms' claims against Golden Corral with prejudice, concluding that fact discovery had failed to uncover any evidence that Golden Corral had done anything wrong under either the contract between the parties or the New Jersey Franchise Practices Act. Further, the Court concluded that the Scisms had breached their contract with Golden Corral by abandoning their restaurant during the middle of the contract term. The Court awarded Golden Corral
Source: Item 3 — LITIGATION (FDD pages 9–10)
What This Means (2025 FDD)
According to the 2025 Golden Corral Franchise Disclosure Document, Golden Corral filed a lawsuit against the Scisms seeking payment of franchise fees exceeding $1 million. This legal action stemmed from the Scisms' abandonment of their Golden Corral franchise.
The details of the case indicate that the Scisms, who were Golden Corral franchisees, were initially sued by a lender after defaulting on a note. Subsequently, the Scisms filed third-party claims against Golden Corral. However, most of these claims were dismissed by the court on December 4, 2019. The remaining claims, related to breach of contract and violations of the New Jersey Franchise Practices Act, were defended by Golden Corral.
Ultimately, on March 27, 2024, the court ruled in favor of Golden Corral, dismissing all claims made by the Scisms. The court determined that the Scisms had breached their contract with Golden Corral by abandoning their restaurant during the contract term. As a result, Golden Corral was awarded over $1.1 million in damages. The Scisms appealed the decision, but the appellate court affirmed the District Court's decision in March 2025, and final judgment was entered in Golden Corral's favor.