As a result of multiple lawsuits and copyright infringement allegations, Quaker Steak & Lube, 2235 N. Atherton St., has closed its doors and has no plans to reopen.
The closing culminates a slew of legal battles since the State College restaurant filed for bankruptcy in early 2008.
"The business is closed, and there are no plans to reopen," said attorney William Labovitz, who represents restaurant owner Larry Salone.
On Aug. 1, Salone filed a lawsuit against Quaker Steak & Lube Franchising Corporation (QS&L) for $5 million in damages on charges of fraud, intentional misrepresentation and breach of contract, among other alleged causes of action.
QS&L allegedly "intentionally misrepresented the financial prospects of the Quaker franchise" and offered insufficient training and operating support from the corporation, according to the suit's complaint.
Salone, owner of Bono Holdings, Inc., entered into the agreement with QS&L in 2005, when he paid $40,000 for the franchise and received a construction loan for $1,560,000, according to the complaint. However, the franchise failed to generate the revenue promised by the corporation, resulting in an $80,000 weekly deficit, the complaint reads.
QS&L stated in the complaint that the franchise was "number 5 in the Top 30 Casual Dining Brands" and would yield revenues of $100,000 per week, or $5 million per year.
However, the franchise averaged less than half of the amount, roughly $40,000, resulting in Holdings' filing for bankruptcy and the restaurant's closing, according to the lawsuit.
In November, QS&L fired back, filing a separate lawsuit on charges of copyright infringement against Salone and Bono Holdings, Inc. because the former parent company did not receive franchise payments from the restaurant owner.
Caught in the crossfire and short on funds, the beleaguered establishment was forced to close, Labovitz said.
He said he hopes there will be a quick resolution to the conflicts -- Salone will still proceed with the initial lawsuit, but they are attempting to reach a settlement between the two parties in regard to Quaker Steak & Lube, Corp.'s latter suit, he said.
Meanwhile, Quaker Steak & Lube sits empty.
"As per the status of the property, it will be determined by the bankruptcy courts," Labovitz said.
