Heidi’s Management Announces Intention to Meet With Franchisees
Management of Heidi’s Frogen Yozurt Shoppes said Thursday that the company will meet soon with franchisees in an effort to iron out differences.
“We are set to meet with the franchisees within 10 days to introduce ourselves and to listen to (their) problems,” said C.E. Prichard of Pasadena, owner of Button Industries of Los Alamitos, in a prepared statement.
Last week, the frozen yogurt chain announced that Button’s Johnston Foods division would merge with Heidi’s, which has its headquarters in Laguna Hills. Prichard will wind up with a controlling interest of about 45% in Heidi’s.
“Our first order of business is to address (their) concerns and solicit their cooperation to solve these problems collectively,” Prichard said.
Franchisee representatives Thursday praised the idea of a session to address their concerns but said they had not yet been contacted about a meeting.
In recent weeks, three lawsuits have been filed by franchisees contending that Heidi’s management--headed by company founder and body builder Heidi Miller--misled them about such matters as potential store sales, equipment prices and whether the company’s product is proprietary.
A wrongful discharge lawsuit also has been brought against the company. John T. Eubanks, a former executive, contends that he was unfairly terminated because of differences with Heidi’s management.
In addition, Prichard said Thursday that franchisees have filed nine arbitration claims involving similar complaints.
Gerald T. Grenert, an Encino attorney who has filed five of the arbitration claims, so said he represents about 28 Heidi’s operators. Those franchisees have paid Grenert and given written approval for him to file claims on their behalf.
A story in Wednesday’s business section incorrectly stated that 29 franchisees already had filed legal actions against the company.
Wednesday’s story also incorrectly reported the company’s financial performance for the nine months ended June 30, 1988. Heidi’s posted a loss of $619,268 for that period.
According to Prichard, the company’s problems are normal. A number of successful fast-food chains “always have about 10% of their franchisees who have opposing views with the franchisor and seek relief through arbitration,” Prichard said in his statement. “Heidi’s is well within these parameters.”
Brian Pallas, Heidi’s executive vice president, said in the statement that the merger with Johnston’s--which includes a yogurt-manufacturing facility--"will permit us to further reduce our losses and turn a profit.”
Prichard and Pallas declined Thursday to elaborate on the release.
But at least one franchisee hopes that Heidi’s management makes good on its promise to turn the company around.
If the company “shows they have a strong management team and comes up with some realistic solutions for problems, franchisees will be ready to cooperate,” said Vince Lo Franco, owner of six franchises in Santa Clara County. Lo Franco has filed a lawsuit against the chain.