Restaurant Wars Push Fuddruckers Franchisee to Buy Burgers at Costco

Posted on January 26, 2011 at 6:06pm by

A duel between the new owner of the Fuddruckers chain and a former franchisee has taken a turn for the dramatic, with the latest alleged punch forcing three of the restaurants in question to turn to Costco for survival.

Luby’s Inc., which last year purchased the hamburger-restaurant chain out of bankruptcy, earlier this month launched a court bid to slap former Fuddruckers executive Ralph Flannery and the companies under his control with sanctions. The Texas company claims that the franchisee continues to operate five restaurants under the Fuddruckers name in violation of an Aug. 25 bankruptcy-court order solidifying Fuddruckers’ rejection of its franchise agreements.

The two parties are scheduled to meet in court this week to duke out their differences, but Flannery claims that in the days leading up to the hearing, Luby’s has opted to take “the law into its own hands.”

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