DOCUMENTATION - NY Bagel Scam

Governmental Actions Against NY Bagel Cafe, Joe Smith, Dennis Mason

Lawsuits & Judgements Against NY Bagel Cafe, Joe Smith, Dennis Mason

Franchise sellers are required to disclose all franchise-related litigation for the previous 10 years in the “Item 3 – LITIGATION” section of their Franchise Disclosure Document (FDD). NY Bagel Cafe Franchise (or License) Disclosure Document we were given said Litigation – None”

We have since learned of many lawsuits, judgements and governmental actions against NY Bagel Cafe, Joe Smith and Dennis Mason that were legally required to disclose, including these:

Jeanette Mora v. New York Bagel Enterprises, Inc., et al. In American Arbitration Case No. 18 114 e 730 10, decided in January 2011, an arbitrator ruled that Joe Smith and NY Bagel Enterprises had wrongfully refused to refund Ms. Mora’s franchise fee of $29,500 after she was unable to obtain financing. The arbitrator awarded Ms. Mora $29,500 in damages, which NY Bagel on partially paid off.

MOHAMED ELSAID v. NY BAGEL ENTERPRISES, INC., JOSEPH SMITH and DENNIS MASON (OPINION) United States District Court of New Jersey filed 11/1/11

NJ resident Mohamed Elsaid, he was sold a NY Bagel franchise in 2011 by Dennis Mason & Joe Smith. His contract stated that his franchise fee was refundable if he failed to get funding but they refused to honor the agreement. The judge ordered NY Bagel to repay victim Mohamed Elsaid (who represented himself) the $9,300 franchise fee he paid.

Gordon Cunningham, Christine Mason, NYB (KENNETT) INC. V. NY Bagel Enterprises, Inc., Joseph Smith, Dennis Mason United States District Court of New Jersey filed 11/1/11

The lawsuit states: When Cunningham inquired about purchasing an NY Bagel franchise in the Summer of 2009, Defendant Mason told him that NY Bagel franchised stores were earning $10 ,000 to $15,000 per week in revenue… After opening the franchise, Plaintiffs learned that the financial performance representations, the representations about food costs, and representations in the FDD were false, misleading, and often incomplete… In total, Plaintiffs have invested and lost roughly $230,000 in the business and Cunningham has taken on personal lease obligations of which roughly $150,000 remain…

Jhagroop v. New York Bagel Franchise, et al, case number 2008-01358 Supreme Court of the State of New York, Orange County

We have no info on the lawsuit yet.

RIMA ALBARQAWI, BASSAM M. BARQAWI, BASIL M. ALBARQAWI vs. NEW YORK BAGEL ENTERPRISES, INC., AND JOE SMITH United States District Court of New Jersey filed 1/21/13. The AlBarawi’s paid a $29,500 franchise fee in 2011 which was not returned. Neither Smith nor Mason would return their calls once they had the money, forcing the AlBarqawi’s to sue.

Huebner vs. New York Bagel Enterprises, Joseph Smith, Dennis Mason United States District Court of New Jersey filed 12/10/13. Franchisee Min Huebner reports that he was awarded a judgement of $383,000 in 2013 which Joe Smith and Dennis Mason have not paid.

NY Bagel Cafe – Undisclosed Bankruptcies

The NY Bagel Cafe License Disclosure Document we were given stated that no one with management responsibilities had declared bankruptcy.

Franchisors are legally required to disclose any bankruptcies filed by anyone with management responsibilities over sales or operations. We have since learned that Dennis Mason, who manages the sales and financing functions of NY Bagel, filed for bankruptcy

Dennis Mason Bankruptcy – 2009

Dennis Mason Bankruptcy Filing – 1987 Dennis Mason also filed for Chapter 7 bankruptcy 1/8/87. It was discharged 8/7/87 in Camden, New Jersey.

Dennis Mason Lawsuits

Dennis Mason’s Bankruptcy filing shows that his franchise litigation goes back many years. This graphic appears on UnhappyFranchisee.Com:

Dennis Mason franchise litigation list is long, spanning several decades and multiple now-defunct franchise companies:

Windmill Franchise Corp. v. Dennis Mason, Franchises Unlimited 11/20/96 Essex County, NJ, Summary Judgement v. Dennis Mason

DGG Inc. et al v. Motorwerks Inc, Dennis Mason, Franchises Unlimited et al Filed 7/10/1997 Demand $250,000 Nature of Suit 190 – Contract: Other County Baltimore County

2000 Stewart, Michele S., MSDS Holdings, Inc. vs. Petrucci’s Franchising, Inc., Petrucci, Michael W., Petrucci, Michael D., Mason, Dennis, Franchises Unlimited, Inc.

Stewart et al v. Petrucci’s Franchising, Inc. et al Date filed: 12/26/2000 Date of last filing: 04/10/2003 Date terminated: 04/10/2003 That’s The Scoop Enterprises, Inc. vs. Petrucci’s Franchising, Inc. , Petrucci, Michael D. , Petrucci, Michael W. , Mason, Dennis, Franchises Unlimited, Inc. Office: Camden Filed: 12/26/2000 County: Terminated: 11/09/2001 2007 Abate v. Amazon Systems, L.L.C., et al, case number AAA 14 114 Y 00399 07 American Arbitration Association

2006 Cutrone v. Java’s Brewin Development, et al, case number MON-L-4639-06 Superior Court of NJ, Law (April 7, 2009) Jamie S. Perri, P.J.Cv., entered a judgment for Plaintiffs against franchisor, principal in franchise company and franchise sales person Dennis K. Mason for fraud and various contract claims, with interest, attorney’s fees and costs in the amount of $241,646 on behalf of three individuals who invested money to purchase and operate a Java’s Brewin’ franchise.2007 Venturine v. Java’s Brewin Development, et al, case number MON-L-385-07 Superior Court of NJ, Law Division, Monmouth County

2008 DiPietro, et al v. Java’s Brewin Development, et al, case number 1:08-cv-1620 US District Court, Eastern District of NY Division, Monmouth County This lawsuit involved allegations of an illicit scheme that Mason and others employed to deceive and induce the plaintiffs into purchasing franchises. Rusell Caporelli v. Dennis Mason, et al, case number BER-L-7179-08 Superior Court of NJ, Law Division, Bergen County – Franchise Dispute

Cafe Brewing Int’l v. Java’s Brewin Development, et al, case number not available Superior Court of NJ, Law Division, Middlesex County