Well, hell. Damn. There goes the local Pizza Mia™ and those chocolate dunky things. And 16 jobs.
Donald Davenport, who with his wife Jo Ann owns the Pizza Hut franchise in Eureka, just flashed us a news release saying they've closed shop.
The Davenports were embroiled in a fight with Pizza Hut, Inc., of Dallas. Pizza Hut, Inc., according to the release, had sued the Davenports, accusing them of "damaging their corporate image" by not buying and putting into service some new software for coordinating in-shop orders, and for not doing internet ordering. The upgrades would have cost thousands.
"These costs were considered an unreasonable request for an independent, one-store owner in an already troubled economy," says the release.
On the phone this evening, Donald Davenport, who owns Winco Realty and Development, explained that he and his wife own the building that Pizza Hut's in, and they took over the franchise in 2006 -- the former franchisee owed them money and had been struggling to keep the pizza joint going. They managed to turn the business around in late 2007, said Davenport, but they hadn't quite made enough money to afford the required updates Pizza Hut, Inc., required of them.
PH Inc sued, they entered mediation, and then, a week ago Monday after nine hours of mediation in Texas, Davenport realized, after talking to the mediator, that while a jury of his peers might see his side, a judge in California might not. He'd be out a half million bucks in litigation fees and a couple of years of time, is what the mediator told him, he said.
So this morning he gathered his employees together and told them the shop was closed, effective immediately. It was devastating, Davenport said -- he and his wife had become close to the employees, and had, in fact, intended to distribute all profits to them, once there were some.
"We let them wander through the store and take whatever food they wanted," he said. "Pizza Hut refused to take our inventory back. So we'll donate the rest to charity."
They're taking down the big Pizza Hut sign tomorrow morning, and the rest of the P.H. images must vanish in short order as well.