7-Eleven, Baskin-Robbins move against LV franchisees

Grace Leong

Thursday, Nov. 4, 1999 | 11:34 a.m.

Baskin-Robbins USA Co. is seeking a preliminary injunction against one of its Las Vegas franchisees, Sarfraz Ali Shah, prohibiting him from violating public health, sanitation and safety standards as set out in its operating manuals and a franchise agreement.

Separately, 7-Eleven Inc. moved to take over a Las Vegas store after claiming its franchisee had violated his contract with 7-Eleven.

In a District Court suit, Baskin-Robbins alleged Ali Shah, who owns and operates a retail ice cream store at 4794 East Flamingo Road in Las Vegas, infringed its trademark rights because the store's alleged poor sanitation standards will likely damage its reputation. The company alleged its franchisee failed to make improvements to the store's sanitation standards despite two health inspections conducted on Sep. 8, 1998, and Oct. 5, 1999, by its representatives.

Baskin-Robbins alleged Ali Shah violated its health and sanitation standards by storing foods that weren't protected from contamination under leaking pipes and by failing to date all food products. It alleged its inspectors found the store's used equipment and utensils weren't being washed, rinsed and sanitized every four hours.

It alleged the store's premises had trash and dirt everywhere and the non-food contact surfaces of the equipment including counterwalls, windows, floors and ceilings weren't maintained and had visible mold and dirt.

The defendant could not be reached for comment. A Las Vegas man who identified himself as Ajmal Khera, Baskin-Robbins' new manager, said Ali Shah had sold him the store for $120,000 in January allegedly without Baskin-Robbin's knowledge.

"This transfer of ownership isn't sanctioned or authorized by Baskin-Robbins. This would be a violation of the franchise agreement and would be another basis for seeking injunctive relief," said a Baskin Robbins attorney. "It could yank the franchise and close the store."

"But it's also a possibility Baskin-Robbins could review him and approve him as a franchisee, but he has to satisfy Baskin-Robbins' conditions for franchises," he said.

Also, 7-Eleven Inc. posted a $75,000 bond to repossess a Las Vegas store operated by its franchisee, Krikor Partiguian, because he allegedly breached its franchise agreement and infringed its trademark rights by refusing to be evicted.

A federal judge on Oct. 22 declined Partiguian's request for a receiver to be appointed to maintain his business and to preserve its licence and slot route contract with United Coin Machine Co. of Nevada, said David Feldman, Partiguian's attorney.

Partiguian said his slot route contract with United Coin, which provides video poker and slot machines at his store for a percentage split of the gross profits generated, would be terminated if 7-Eleven repossessed the store.

"What precipitated this was the fact that Partiguian did not comply with the franchise agreement by failing to provide daily deposits for receipts to the bank and cash reports from Aug. 28 through Oct. 5 1999," said Margaret Chabris, 7-Eleven's spokeswoman. "Nowhere in his suit and motion did he refute our allegation that he didn't make daily deposits and file cash reports."

In a motion filed Oct. 13, Partiguian, a franchisee of the 7-Eleven store at 200 West Boston Ave. since May 5, 1989, accused its employees of allegedly fabricating a breach of the franchise agreement to dispossess him of his store.

Partiguian alleged 7-Eleven changed the locks on the store safe to frustrate his financial record keeping, and allegedly planted expired perishable goods to reflect a poor health rating on the store.