Bitter coffee feud continues with new suit

A former Dazbog location at 110 16th St. was recently converted into a Genessee Coffee. Photos by George Demopoulos.

A former Dazbog location at 110 16th St. was recently converted into a Genessee Coffee. Photos by George Demopoulos.

The already soured relationship between a Denver coffee chain and a former franchisee continues to curdle in court.

Coffee shop brand Dazbog Coffee sued former franchisee Padbros Enterprises in district court last week, accusing Padbros of violating a non-compete section of a franchise agreement when it suddenly rebranded two Dazbog locations as Genessee Coffees last month. Those shops are at 1200 Clayton St. and 110 16th St.

In its complaint, Dazbog requested that Padbros be forced to close its coffee shops. It also wants anyone working for Padbros to be banned from opening coffee shops within 10 miles of a Dazbog for the next two years.

According to the lawsuit:
“Defendants have access to, and continue to use, the goodwill associated with DAZBOG, its marks and business methods to operate their Competing Businesses, and Defendants are trading on the trade secrets and business methods of DAZBOG within their Competing Businesses in violation of their non-compete (clause).”

Dazbog founder Leonid Yuffa declined to comment when reached by phone. Dazbog’s attorney, William Jones of Moye White, did not return calls for comment.

Douglas Norberg, a lawyer representing Padbros, said in a written statement that Dazbog exploits its franchisees by charging prices that are considerably higher than industry standards for products that must be purchased from Dazbog.

He referenced a prior case involving a different group of franchisees that ruled the franchise agreements weren’t enforceable and released the franchisees from their contracts. One of those franchisees was Genessee Elinoff, who then converted her DTC Dazbog into the first Genessee Coffee in October.

This is not the first time Dazbog and Padbros have sparred in court.

In October, Padbros sued Dazbog over what it claimed were unfair prices on supplies like cups.

Dazbog then sued Padbros last month to terminate its lease at 1200 Clayton St. Both of those cases are still active.

Yuffa founded Dazbog in 1996 with his brother Anatoly. Since then, it’s grown to include 28 locations from Castle Pines to Cheyenne.

A former Dazbog location at 110 16th St. was recently converted into a Genessee Coffee. Photos by George Demopoulos.

A former Dazbog location at 110 16th St. was recently converted into a Genessee Coffee. Photos by George Demopoulos.

The already soured relationship between a Denver coffee chain and a former franchisee continues to curdle in court.

Coffee shop brand Dazbog Coffee sued former franchisee Padbros Enterprises in district court last week, accusing Padbros of violating a non-compete section of a franchise agreement when it suddenly rebranded two Dazbog locations as Genessee Coffees last month. Those shops are at 1200 Clayton St. and 110 16th St.

In its complaint, Dazbog requested that Padbros be forced to close its coffee shops. It also wants anyone working for Padbros to be banned from opening coffee shops within 10 miles of a Dazbog for the next two years.

According to the lawsuit:
“Defendants have access to, and continue to use, the goodwill associated with DAZBOG, its marks and business methods to operate their Competing Businesses, and Defendants are trading on the trade secrets and business methods of DAZBOG within their Competing Businesses in violation of their non-compete (clause).”

Dazbog founder Leonid Yuffa declined to comment when reached by phone. Dazbog’s attorney, William Jones of Moye White, did not return calls for comment.

Douglas Norberg, a lawyer representing Padbros, said in a written statement that Dazbog exploits its franchisees by charging prices that are considerably higher than industry standards for products that must be purchased from Dazbog.

He referenced a prior case involving a different group of franchisees that ruled the franchise agreements weren’t enforceable and released the franchisees from their contracts. One of those franchisees was Genessee Elinoff, who then converted her DTC Dazbog into the first Genessee Coffee in October.

This is not the first time Dazbog and Padbros have sparred in court.

In October, Padbros sued Dazbog over what it claimed were unfair prices on supplies like cups.

Dazbog then sued Padbros last month to terminate its lease at 1200 Clayton St. Both of those cases are still active.

Yuffa founded Dazbog in 1996 with his brother Anatoly. Since then, it’s grown to include 28 locations from Castle Pines to Cheyenne.

This story is for our paid subscribers only. Please become one of the thousands of BusinessDen members today!

Your subscription has expired. Renew now by choosing a subscription below!

For more informaiton, head over to your profile.

Profile


SUBSCRIBE NOW

 — 

 — 

 — 

TERMS OF SERVICE:

ALL MEMBERSHIPS RENEW AUTOMATICALLY. YOU WILL BE CHARGED FOR A 1 YEAR MEMBERSHIP RENEWAL AT THE RATE IN EFFECT AT THAT TIME UNLESS YOU CANCEL YOUR MEMBERSHIP BY LOGGING IN OR BY CONTACTING [email protected].

ALL CHARGES FOR MONTHLY OR ANNUAL MEMBERSHIPS ARE NONREFUNDABLE.

EACH MEMBERSHIP WILL ONLY FUNCTION ON UP TO 3 MACHINES. ACCOUNTS ABUSING THAT LIMIT WILL BE DISCONTINUED.

FOR ASSISTANCE WITH YOUR MEMBERSHIP PLEASE EMAIL [email protected]




Return to Homepage

POSTED IN Restaurants

Editor's Picks

Leave a Reply

Your email address will not be published. Required fields are marked *