International House of Pancakes IHOP Franchise Class Action Lawsuit

International House of Pancakes IHOP Franchisees File Class Action Lawsuit Against International House of Pancakes IHOP Over Equipment Lease Rental Charges, IHOP’s Advertising Fund, IHOP’s Development Impact Assistance Program (“DIAP”) and Alleged Property Tax Increases Relating to Sale Leaseback Transactions.

A class action lawsuit has been filed against IHOP Franchising, LLC, IHOP Properties, LLC, International House of Pancakes, Inc., IHOP Restaurants, Inc., IHOP Properties, Inc. and DineEquity, Inc. (collectively “International House of Pancakes” or “IHOP” or “Defendants”) in the Superior Court of the State of California in and for the County of Sacramento (styled Sultan Hameed v. IHOP Franchising, LLC, et. al., Case No. 34-2010-00081992), on behalf of IHOP franchisees allegedly seeking, among other things, a declaration that equipment rent is not owed to International House of Pancakes IHOP for equipment (and/or rights to equipment) owned outright and/or leased from third-party entities and to which IHOP allegedly has no ownership or other possessory interest and a declaration that there is no obligation to pay increased property taxes resulting from any sale leaseback transaction with IHOP and any other party, according to a class action lawsuit news report.

The International House of Pancakes IHOP franchise class action lawsuit complaint is reportedly brought on behalf of a Declaratory Relief class and the following classes:

1. An “Equipment Lease” class consisting of IHOP franchisees who entered into a standardized IHOP Franchise Agreement and standardized IHOP Equipment lease and who paid rent to IHOP for equipment owned outright by the franchisee or leases from a third party;
2. An “Advertising Fund” class consisting of IHOP franchisees who entered into a standardized IHOP Franchise Agreement and who made national and local advertising fund contributions to IHOP;
3. A “DIAP” class consisting of IHOP franchisees who were denied participation in IHOP’s Development Impact Assistance Program (“DIAP”) despite their IHOP restaurants being opened and in operation at least six months prior to a “new” IHOP restaurant being opened where (1) the “new” IHOP restaurant was opened within five miles or less, or (2) the existing and newly opened IHOP restaurants were located (a) within 1000 feet of an off-ramp or exit from an interstate highway or freeway or directly visible from the interstate highway or freeway, and (b) within 10 minutes driving time from each other at the posted speed limit.
4. A “Property Tax” class consisting of IHOP franchisees who entered into a standardized IHOP form “Sublease” or other agreement preventing any material increase in the franchisee’s obligations during the term of the Sublease in connection with a sale and/or sale/leaseback transaction of the underlying franchisee restaurant premises, but who in fact were required to pay “pass through” tax payment increases.

For more information on the International House of Pancakes IHOP Franchise class action lawsuit, read the International House of Pancakes IHOP class action lawsuit complaint.

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