Pizza World franchisees claim sellers understated operating costs
A Granite city husband and wife are accused of providing false information during the sale of one of their pizza stores.
John and Susan McGill and SJ McGill Inc. filed a lawsuit Nov. 9 in Madison County Circuit Court against Eric and Michelle Wortham. Pizza World USA Franchise Corporation and Woodriver Pizza Inc. are also named as defendants.
According to the complaint, the McGills agreed in April to buy the Pizza World USA franchise located in Wood River from the Worthams. The McGills say the sellers told them the restaurant had been earning a profit of $2,000 a month. The McGills paid the Worthams, owners of Pizza World Franchise Corp. and Woodriver Pizza, $97,000 for the store plus $22,000 in franchise fees, according to court records.
After taking over the business, the McGills say they found out the Worthams lied about the business' operating costs. The McGills allege the former owners understated the labor costs by more than $30,000 per year. They claim the previous owners had a history of paying employees cash to avoid paying required federal and state withholding taxes.
The McGills also claim Pizza World could not pass a health inspection because of inoperable hot water sinks. The couple says they have been running the business but have lost $25,000 since the purchase.
The McGills accuse the Worthams of fraud and of violating the Illinois Franchise Disclosure Act. They ask that the purchase agreement be rescinded and they be refunded their purchase price of $97,000. They are also seeking more than $950,000 in compensatory and punitive damages plus court costs.
Attorney David M. Duree of O'Fallon is representing the McGills. They ask for a jury trial.
Madison County Circuit Court Case No.11-L-1190.