PLANO, Texas--(BUSINESS WIRE)--A franchisee of Sanford Rose Associates recently filed a counterclaim in Texas district court that alleges fraud and deceptive trade practices among other charges against the executive search firm. Nebo & Finch, Inc., a franchisee of Sanford Rose Associates, alleges in the counterclaim that the search firm illegally recorded telephone calls between Nebo & Finch and residents of several states that require two-party consent. In addition, the counterclaim alleges Sanford Rose Associates violated Federal Trade Commission requirements when it failed to disclose at least one and possibly more lawsuits the firm had filed against former franchisees.
In 2016, Nebo & Finch signed a franchise agreement with Sanford Rose Associates to become a franchisee of the Texas search firm in New Hampshire.
According to the lawsuit, Sanford Rose Associates “failed to disclose that the actions required or permitted to properly conduct the business of the franchise or the counter-defendant’s parent Kaye-Bassman (KBIC), were illegal activities – recording telephone conversations without proper consent with the intent to use illegally obtained information for commercial gain.”
The counterclaim also alleges Sanford Rose Associates misrepresented the anonymity of a survey measuring franchisee satisfaction; failed to provide training as promised in the franchise disclosure document and franchise agreement; used false advertising to induce Nebo & Finch to sign the franchise agreement; and omitted material information regarding other litigation against the franchise’s parent, KBIC, and the two companies’ CEOs.
Nebo & Finch states in the counterclaim that it was never informed that Sanford Rose Associates was involved in criminal activities before the franchise agreement was signed. The company further states that it would not have invested any money in Sanford Rose Associates had it known about the crimes prior to signing the contract.
The counterclaim seeks to recover losses including the franchise fee down payment, startup costs, travel costs and other expenses, including attorneys’ fees. Nebo & Finch also seeks punitive damages related to loss of reputation, time and credit.