Client: Chair 5 Restaurants

Scenario: Chair 5 Restaurants, a franchisee of Qdoba Mexican Grill, was set to open a new location at White City Shopping Plaza in Shrewsbury, Mass., when it was sued by Panera Bread. Panera’s lawsuit claimed that White City had violated its exclusivity clause of not leasing to businesses that primarily sell sandwiches.

Chair 5 had already invested $300,000 for architectural plans, permitting, and construction. If the court had entered an injunction against Chair 5, this investment would have been for naught.

“We had already signed the lease and begun the process of building the store and purchasing equipment,” said Jeff Ackerman, owner of Chair 5 Restaurants. “Everything was in motion and the lawsuit put a halt to it. Time was of the essence in resolving this case.”

Value added: Chair 5’s corporate counsel uncovered a previous case where Panera Bread had been involved on the other side of the issue, claiming they should not be restricted from another mall where a Subway Sandwich franchise existed because Panera’s products were specialized. This demonstrated Panera’s lack of credibility in claiming it was primarily a sandwich shop. The court looked askance on this change in position.

Essentially the crux of the case came down to proving that a burrito is not a sandwich. Burns & Levinson knew that with the time constraints involved in the situation, they needed to secure very strong expert testimony. With the help of Chair 5, Qdoba’s national parent, they procured affidavits from three experts: restaurateur and culinary historian Christopher Schlesinger, who has written for the New York Times; a former deputy director of the Standards & Labeling Division at the U.S. Food and Drug Administration, who developed an affidavit defining how burritos and sandwiches are regulated differently; and a food and drink critic for the Boston Herald, who explained that a burrito is a distinctly Mexican food product and different from a sandwich.

Panera’s argument hinged on a previous case involving export regulations that stated that a tortilla is a form of bread, but Burns & Levinson successfully argued that this was a specialized case that should not carry the day, particularly since export regulations are very specific.

The judge issued a very strongly worded ruling denying Panera’s injunction. The judge disagreed with the claimant’s argument that a burrito was a sandwich and Panera’s claim that they would be irreparably harmed by Qdoba’s presence in the same shopping plaza.

Ackerman commended the legal work of Burns & Levinson attorney Lawrence Green, co-chair of the firm’s business litigation practice.

“Burns & Levinson is our corporate counsel and this was the first time we worked with them on a litigation matter,” Ackerman said. “No company ever wants to get sidetracked with litigation, but working with Burns & Levinson on this case was a wonderful experience. Larry Green is a first-class gentleman and litigator. We were impressed with his courtroom ability. The entire team was very resourceful, easily combating the lawsuit. We’re delighted with the outcome.”