Did the court find that Golden Corral breached its contract with the franchisee?
Golden_Corral Franchise · 2025 FDDAnswer from 2025 FDD Document
ry 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, in the case of BANKUNITED, NA v. GC OF VINELAND, LLC, the court ruled in favor of Golden Corral. The franchisee, GC OF VINELAND, LLC, along with its owners, were sued by a lender after defaulting on a note. Subsequently, the franchisee and its owners filed claims against Golden Corral, alleging breach of contract and violations of the New Jersey Franchise Practices Act. However, the court dismissed all of the franchisee's claims against Golden Corral.
The court specifically concluded that the franchisee had not provided any evidence that Golden Corral had acted wrongly under the contract or the New Jersey Franchise Practices Act. Furthermore, the court determined that the franchisee breached their contract with Golden Corral by abandoning their restaurant before the contract term ended.
As a result of the franchisee's breach, the court awarded Golden Corral over $1.1 million in damages. This outcome underscores the importance of franchisees fulfilling their contractual obligations and the potential financial repercussions of failing to do so. Prospective Golden Corral franchisees should carefully review the terms of the franchise agreement and understand their responsibilities to avoid similar legal and financial consequences.