Pizza Hut franchisor Pizza Pan Group sues Salisbury franchisees from almost $400,000 claiming they ‘abandoned’ the store

Two former Pizza Hut franchisees have been hit with a $400,000 lawsuit by the global fast food giant after claims that a northern suburbs outlet was “abandoned” by the pair.

Global fast food giant Pizza Hut is seeking $400,000 in damages and unpaid costs from a northern suburbs man and woman, accusing them in a lawsuit of abandoning their franchise only two years into a decade-long contract.

And as the District Court action continues, the Pizza Pan Group Pty Ltd, the franchisor for all Pizza Hut dine-in restaurants and takeaway outlets across Australia, is also claiming more and more money in interest on outstanding debt – $43.29 per day.

Documents released by the court claim that Ranjodh Singh Joshan and Jasbir Kaur Singh entered into an agreement with Pizza Pan on July 3, 2017 to start a franchise of the company on Park Tce, Salisbury.

The company claims the agreement was to run to December 18, 2026.

However the owners deny they owe the company anything, arguing in a defence lodged with the court that the contract created a right to continue operating for 10 years, not an obligation.

Pizza Pan argues that under the contract it would have received 6 per cent of the outlet’s revenue in addition to other contributions for advertising and ensuring the supply chain of pizza-related materials.

Dine-in Pizza Hut restaurants were once ubiquitous across Australia. File photo.

The contract specifically noted that Pizza Pan could terminate the agreement if the storefront was abandoned for more than three days without permission, or if outstanding debts were not paid.

Pizza Pan was also indemnified under the contract for any costs or debts racked up by the franchisee.

Pizza Pan claims the pair abandoned the storefront in October 2018 and the company which had been incorporated to manage the business was deregistered two weeks later.

In the month before the store and business were allegedly abandoned, Pizza Pan had claimed $3081 in royalties and other fees from the pair.

But the largest part of the lawsuit is a claim for $313,000 in lost fees which would have been paid to the company if the franchise had continued to operate for the entire 10 years.

In July 2019, Pizza Pan sent a letter demanding debt be repaid.

It then launched court action after the debt remained outstanding and more than $48,000 of interest had accrued.

In their defence, the owners deny all allegations against them and say they are sub-franchisees and not subject to the initial contract in any event.

The case continues.