5 & Diner at Arizona Mills Operating Rogue, Says Franchise Corporation in Federal Lawsuit

The 5 & Diner at Arizona Mills Mall owes a lot more than nickels and dimes to its parent corporation and has breached its franchise agreement, a federal lawsuit claims.

Valerie Nabasny, who has owned the mall location since 2001, stopped making required payments in 2009 and now owes more than $120,000 in royalties and interest, claims the corporation, 5 & Diner North American, LLC, of Massachusetts.

A franchise agreement between "FDNA" and Nabasny has been terminated, but Nabasny is ignoring a cease-and-desist order sent out January 31, according the federal complaint filed yesterday.

The lawsuit says Nabasny was supposed to pay a yearly fee plus 5 percent in gross earnings for the rights to use the 5 & Diner motif. Nabasny's ex-husband, Robert, is also named as a defendant.

The corporation wants a federal judge to order the mall eatery to stop using 5 & Diner signage immediately and remove from the premises all the signature features like chrome, red-and-silver vinyl booths, those cute little tabletop jukeboxes and the employees' 1950s-style costumes. Financial re-compensation and attorneys' fees are also being sought.

Nabasny wasn't at the location when we called, but an employee said she'd hand the phone to Nabasny's "boyfriend." A man who said his name was Bill then picked up the phone, but Bill said he hadn't yet seen the lawsuit and couldn't comment.

Sean Carroll of Gordon & Rees, LLP, a lawyer for the parent corporation, said he can't comment without the okay from his client. He said he'd give a message to the 5 & Diner company.

The company's Web site was still advertising the Arizona Mills Mall location as of this morning.

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.
Contact: Ray Stern