The instruction court 52 of Madrid is investigating the owner of the Restalia group, Jose Maria Fernandez Captain, founder of brands such as 100 Montaditos, La Sureña or The Good Burger, and another twenty company managers, for suspected scams that dozens of group franchisees would have suffered throughout Spain.
As the Efe agency has advanced, The complaint, filed by a group of 31 franchisees through the office Rafael Franco Lawyersaccuses Restalia of a continued crime of fraud, criminal organization, coercion and computer crimes.
The complaint also includes a possible crime against consumers, since, according to the complainants, Restalia was supplying its franchisees meat with a past best before datewhich could constitute “serious risks to public health”.
The investigation is still in a preliminary phase, but, according to the complainants, Restalia and those responsible for the companies they would have hidden the existence of agreements with suppliers that made the project unfeasible.
Unviable franchises
Apart from the possible crimes against public health, the core of the complaint charges against a franchise model – which has already been persecuted in the US – for which the company that sells these promises unreal benefits and, in the long run, impossible to achieve.
According to the complainants, “an unviable business model was imposed with all sorts of cost overruns”
The complaint states that “the defendants deliberately concealed from the franchisees the existence of supplier agreements which meant, ultimately, that the franchise was unviable”.
Before the contracts were signed, the complaint explains, the company presented unrealistic feasibility studies, which showed benefits that were impossible to achieve. Afterwards, a network of pre-contracts and development contracts was unfolded with apparently advantageous conditions that led to a final contract in which, according to the complainants, “it was imposed an unviable business model with all sorts of extra costs”.
If you earn money, it will be little
The reality, as a company franchisee explained to DAP, is that the only way for a 100 Montaditos to make a profit is by having a gigantic volume of sales, since the company controls the prices –which are always very low–, it forces to the same providers and leave a very little operating margin to franchisees. Hopefully they manage to make some money from the drinks, one of the few legs of the business that is not as regulated, but it is very difficult to benefit from this if, for example, your restaurant is in a shopping center.
For complainants, this “unilateral price fixing” and “the obligation to exclusively supply merchandise from approved suppliers” is typical of a “criminal organization”.
Sandwiches, art between two breads (Kitchen)
The complaint, they explain in El País, includes an audio in which a franchisee asks a Restalia advisor: “But if I am showing that I can buy cheaper and make my company viable and that it does not have to close, neither do I are you going to leave me?” To which they reply: “If it is not the approved product…”
Restalia has responded to the accusations with a statement in which it ensures that the company “rigorously” complies with current regulations and, furthermore, has no record or received any complaint or citation” and states “the absolute tranquility of having acted in a transparent manner and in accordance with the contracts and agreements with its franchisees in all their terms and conditions”.
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