Dallas, Texas – A Dallas County jury has awarded over $30 million in damages to a fast food operator who claimed he was defrauded by a major Popeyes franchisee. Scott Stockton, a 73-year-old seasoned operator, worked for a subsidiary of Dallas-based Sun Holdings Inc. and owner Guillermo Perales. Stockton managed up to 150 Popeyes restaurants over a 17-year career with the company.
The lawsuit, filed in 2019, alleged that Perales asked Stockton to defer his 5% annual profit share in exchange for an interest in the larger company. However, when Stockton retired in 2018, Perales reportedly denied him the money owed. Perales denied the allegations and requested evidence, arguing that Stockton was not the key operator for all of his franchises and that inaccurate figures were used to analyze operating profits.
The jury ultimately sided with Stockton, awarding him $15.6 million in compensatory damages and $15.1 million in punitive damages. Stockton’s attorney, Daniel Charest of Burns Charest LLP, stated that the verdict affirmed that everyone, regardless of their wealth, is equal before the law. On the other hand, Michael Hurst, an attorney for the defendants, expressed belief that the claims against Perales are false and plans to challenge the verdict in the trial court.
Guillermo Perales, owner of Sun Holdings Inc., is recognized as one of the country’s most successful and prolific restaurant operators. Sun Holdings operates over 800 locations for various brands, including Burger King, Arby’s, and Krispy Kreme, generating over $700 million in annual revenue. Perales is highly regarded as one of the most successful Latino businessmen in the Dallas-Fort Worth area.
The outcome of this case may have significant implications for franchise relationships and the treatment of key operators within the fast food industry. The award underscores the importance of transparency and fair compensation agreements between franchisors and operators. As Perales’ attorneys plan to appeal the judgment if entered, the legal battle is likely far from over. Both sides continue to present their arguments in what appears to be a complex and contentious legal dispute.