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Lawsuit leads to shop closings

Michael Schwartz September 4, 2013 2
The Dunkin Donuts location store at 11 S. Nansemond St. (photo by Michael Schwartz)

The Dunkin Donuts location store at 11 S. Nansemond St. (photo by Michael Schwartz)

A Carytown doughnut shop and several of its local sister stores have been shut down as their owners fight a lingering court battle against a famous sweets brand.

At least four Dunkin Donuts locations around Richmond were closed on Sept. 1. They include Dunkin Donuts shops at 9225 Atlee Road in Mechanicsville, 4417 W. Hundred Road in Chester, 11556 Busy St. just off Midlothian Turnpike, and a combination Dunkin’ Donuts/Baskin-Robbins store at 11 S. Nansemond St. in Carytown. Signs were posted at the locations informing customers of the closings and the shops’ phones continued to ring unanswered Tuesday.

The closures were made as the shop’s owners and Dunkin Donuts corporate executives try to find common ground in a seven month-old federal lawsuit. The two sides are set to meet with a court-ordered mediator today in an attempt to move closer to a settlement.

The disagreement began in February when Dunkin’ Donuts and Baskin-Robbins sued a slew of LLC owners at 10 locations around Central Virginia, including seven in the Richmond area and three in Fredericksburg. The Massachusetts-based doughnut and ice cream company claimed the individual stores had fallen behind on lease payments for the storefronts and franchise fees that gave them the right to wave the flag of the well-known brands.

The Atlee Road store in the Rutland Commons shopping center.

The Atlee Road store in the Rutland Commons shopping center.

The store owner-LLCs are all tied back to CDG Virginia, which was also sued in the case. CDG bought into the Dunkin/Baskin-Robbins system to control and open stores in certain parts of the of the Central Virginia territory.

Dunkin and Baskin-Robbins alleged trademark infringement and demanded the stores cease use of all branded items and signage, unless they paid up.

The store owners fired back weeks later, demanding the case be tossed out and filed a counterclaim alleging breached agreements and a breach of good faith.

An agreement reached in May allowed certain locations to remain in business while the suit was being litigated. However, CDG and its fellow defendants allegedly defaulted on that agreement in August, leading to the closures last weekend, according to court records.

The closures may not be permanent. Signs posted on the door of the Carytown and Atlee Road locations said the stores are temporarily closed and hope to reopen soon.

Should a settlement not be reached through mediation, a trial date has been set for Oct. 24 in Richmond federal court.

Sandy Tucker, a Williams Mullen attorney, is representing Dunkin Donuts and Baskin-Robbins corporate.

“Obviously we want the money that’s owed,” Tucker said.

CDG and the individual store LLCs are represented by Pavan Khoobchandani, an attorney with the firm Akerman Senterfitt in Washington, D.C. He did not return a call seeking comment on the case.

The latest closures follow those of three other stores that were shut down voluntarily in March. Those include Dunkin shops at 5400 Jefferson Davis, 15740 Woods Edge Road in Colonial Heights, and 3990 E. Williamsburg Road in Sandston.

On Aug. 22, the owners of the stores at Jefferson Davis, Woods Edge and Williamsburg Road filed suit against CDG and the store LLCs in Henrico County Circuit Court alleging default on their lease agreements. The landlords are seeking to collect a combined $1 million in unpaid rent and real estate taxes on the three locations.

Richmonders will not go completely without Dunkin Donuts while the dispute plays out.

At least four other area Dunkin locations remain open for business and unattached to the legal case. They include the Short Pump store at 4050 Spring Oak Drive, 7300 Staples Mill Road, 5113 Oaklawn Blvd. in Hopewell, and 13847 Hull Street Road in Midlothian.

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2 Comments »

  1. David Gee September 4, 2013 at 9:21 am - Reply

    How much dough are we talking about?

  2. Michael D. September 4, 2013 at 10:00 am - Reply

    Mostly new stores, especially in Carytown, and trying to rebuild and expand in VA. Wow this is so NOT the way to expand your brand. Keep them closed too long and the locations will not do so well when they reopen. Seems both parties are making poor decisions.

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