Franchising arm of San Diego’s Donut Bar data files for bankruptcy liquidation

The franchise arm of San Diego-based mostly Donut Bar has submitted for personal bankruptcy liquidation amid a lawsuit, franchisee arbitration statements and sanctions levied by state regulators.

Sweet Property Franchise Team sought Chapter 7 security on Sept. 14. It statements to have $3,800 in assets and $2.4 million in liabilities.

The well-liked doughnut outfit awarded almost a dozen franchises for new locations around the past three many years, but a number of unsuccessful to open or promptly closed. Attempts to arrive at Donut Bar co-founder Santiago Campa on Friday were being unsuccessful.

According to the company’s website, 7 retailers are open today. They involve the flagship Donut Bar in downtown San Diego. Others locations are in Eastlake, Temecula, Pacific Beach front, Riverside, Tucson and Las Vegas.

Some of these retailers are independently owned, explained Anerio Altman, the bankruptcy law firm for the company. Their functions are not related to the individual bankruptcy liquidation of Sweet Property, which is a franchising keeping firm, he explained.

Two suppliers, in Eastlake and Temecula, confirmed to the Union-Tribune that they would carry on running as usual less than the Donut Bar identify. Other stores could not be arrived at for comment.

It is mysterious how quite a few, if any, Donut Bar shops remain linked with Campa, who is president and chief government of Sweet Belongings.

On June 29, the California Commission on Business enterprise Oversight, which regulates franchise organizations, sanctioned Sweet Belongings for misleading franchisees around first startup and working charges.

The regulator also located the organization unsuccessful to disclose a civil lawsuit and individual bankruptcy involving previous Main Running Officer Jorge Quiroz, and presented distinctive disclosures to franchisees than it did to condition regulators.

The fee fined the business much more than $17,000 and requested it to refund inside 60 days any franchise fees and royalties it collected in link with agreements that violated the state’s Franchise Investment Regulation.

Sheley Brien, who operated the Scottsdale Donut Bar, reported the misleading data led her to close her outlet immediately after a quick time. Losses have reached $1 million, she said. She is at present in arbitration with Sweet Property.

“We are nonetheless dealing with the ramifications of their gross misrepresentations when it came to their numbers on the paperwork,” she said. “The section of Enterprise Oversight also uncovered everything was misrepresented and fraudulent.”

A personal trader team sued Sweet Belongings, Campa and many others in March, declaring they defrauded the group into lending the business at minimum $735,650 less than false pretenses.

Sweet Property and Campa have “since refused to make good on their money owed — in spite of Campa just lately putting up images of himself on social media driving a Ferrari and posing in front of a non-public jet,” explained Blake Zollar, an Encinitas legal professional representing the team.

“In link with the litigation, my customers have sought and will look for data in discovery about each Sweet Property Franchise Group’s and Donut Bar’s finances and enterprise dealings,” he claimed.

In the bankruptcy submitting, Donut Bar shops in Pacific Seashore, Temecula, Riverside, Tucson were determined as “current operational franchisee in great standing.”

There is no point out of areas in downtown San Diego, Eastlake or Las Vegas in the personal bankruptcy files. At the very least two Donut Bar stores that closed remain in arbitration.