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    Uni-Mart Pays $2 Million to Settle Lawsuit

    Franchisees alleged the company misrepresented and omitted info on purchase materials.

    STATE COLLEGE, Pa. -- Uni-Mart, operator of 288 convenience stores and Choice Cigarette Discount Outlets headquartered here, will spend $2 million to settle a 10-month- long lawsuit between 172 owners in the state that operate Uni-Mart stores, and pay for other services and operating costs, the Citizen Voice reported.

    The store owners sued the company for "extensive and ongoing wrongful conduct," which included the misrepresentation and omission of information that was provided in materials to solicit buyers for the stores, and as a result of the information, the owners were mislead about the operating costs and profitability, the report stated, citing the lawsuit.

    The $2 million will be split among owners of 67 stores, which will continue to do business with Uni-Mart, the Citizen Voice report stated. In addition, the settlement limits the company from selling gas to store owners for more than two cents more than the price at which it was purchased, the report stated.

    Other terms of the settlement include:

    -- Paying $250,000 to replace outdated cash registers;

    -- Paying $2,500 to stores that chose to discontinue operations with an ATM company;

    -- Reimburse the stores' rent when the replacement or maintenance on gasoline tanks disrupts the sale of fuel for more than five days; and

    -- An annual payment of $2,300 per store to retain services of a maintenance contractor.

    CSNews Online reported in October 2004 that Uni-Marts planned to sell approximately 250 of its 276 locations in Pennsylvania, New York, Delaware and Maryland to independent dealers and licensees over the next year -- following a then-growing industry trend of divesting direct-operated units to independent dealers. The company said at the time that it would likely continue to run some of the remaining stores, using them for training and other purposes.

    "The stores will have our name, the locations, all of our backing and all of our systems and operating methods available to them," the company's founder, Henry Sahakian, told CSNews at the time. "The owners can either buy [the operating systems] or we will offer training for them as needed, as well as any other services we can provide. Our organization will stand behind our licensees."

    The stores were offered through a sealed bid sale process coordinated by NRC Realty Advisors LLC. Uni-Marts and NRC said they were conducting a series of how-to-buy seminars to familiarize interested buyers with the offerings, the terms and conditions of the sale and bidding procedures, according to the CSNews report.

    According to the lawsuit, however, the information the owners received "contained serious omissions and representations" and in particular, Uni-Marts allegedly misled the owners about critical costs to operate the stores, misstating or neglecting to mention how much payroll, maintenance, taxes and insurance would be.

    The company also is said to have overcharged the owners for gasoline, in violation of agreements, and the defendants even prohibited the owners from contacting personnel at stores they were considering purchasing, the suit stated.

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