Does the name "Rita's Water Ice" mean anything to you?
It might if you have ever spent a significant amount of time in Philadelphia, where Rita's Water Ice is a household name.
Recently, Rita's Water Ice sued a company that made "water ice" using the Rita's name, but without actually using Rita's recipes or mixes -- or having a franchise agreement in place.
Evidently, Rita's Water Ice and the three entrepreneurs it has now sued did enter into a 10-year franchise agreement. However, after Rita's Water Ice learned that the three were selling counterfeit items and were otherwise violating the terms of their agreement, they terminated the franchise.
It is not clear how long ago the franchise agreement was terminated.
If Rita's is to be believed, the three businesspeople continued to sell products under the Rita's name, even though they were not genuine Rita's products and they had no right to do so.
The three people whom Rita's has sued have not commented publicly on the lawsuit.
Without taking either side, we would like to point out that franchise agreements are not always the clearest or easiest documents to understand. It has happened more than once than both sides think they understand the agreement and later find out that they each had entirely different concepts of what they agreed to.
If you are considering entering into a franchise agreement, make sure that you understand what you are agreeing to from the outset. That will reduce the likelihood of further problems down the line.
Source: Pennyslvania Record, "Rita's Water Ice says franchisee selling unauthorized sweet treats," Kelly Holleran, April 24, 2013
