Franchisee sues Coffee Club over $1.4m loss
A former Coffee Club franchisee is suing the restaurant chain claiming losses of up $1.4 million after it opened a rival outlet in the same Gold Coast shopping centre.
Jeremy Swift, who operated the Robina Coffee Club for more than a decade until last year, says the chain opened a store called First Ave immediately above his own business in the Robina Town Centre with similar decor, menu and coffee.
Mr Swift, who had operated the popular outlet at for 15 years, closed the business last December accusing Coffee Club of breaching the Franchising Code and of unconscionable conduct.
He said the First Ave store was a direct competitor of his store and created confusion among customers that both stores were Coffee Club outlets.
In a claim lodged in the Federal Court, Mr Swift claimed the First Ave store accepted Coffee Club VIP cards, used Coffee Club coffee beans and had a menu that had 90 per cent of the same food items that he offered.
Mr Swift alleges this was in breach of the franchise agreement which required Coffee Club stores to be at least 1km apart from each other in order not to directly compete.
He claims the First Ave store featured similar decor to his own shop including a stone finish main counter situated next to a three-shelf glass counter cake and pastry cabinet.
"It stocked the cake and pastry cabinet with the same or very similar slices, muffins and savouries as those displayed in the cake and pastry cabinet of the Robina Coffee Club store," the claim said.
Mr Swift also alleged First Ave often traded under the name Coffee Club including when advertising for staff and invoicing suppliers.
"The store featured a layout and fit-out that was substantially similar to the Robina Coffee Club in that it had a similar style, size and location of the menu board at the front of the store," the claim said. "It featured the same or very similar silver metal stands at the front of the store to advertise current specials, offers or menu items."
In a defence lodged with the court, Coffee Club Franchising Co denied any wrong doing or that is caused any losses to Mr Swift.
It said it admitted the First Ave store used some Coffee Club branded products and for a brief period accepted Coffee Club VIP Cards.
But it said the First Ave store was operating with Mr Swift's knowledge prior to him renewing his franchise agreement with Coffee Club.
Further, Mr Swift was offered the opportunity to manage the store and earn a percentage of its profit, an offer he declined to prior to the store opening.
Originally published as Franchisee sues Coffee Club over $1.4m loss