Mostaza: Argentine fast food chain under legal scrutiny

Concessionary franchise agreements run by fast food business “Mostaza y Pan” under review by Judge

National Criminal and Correctional Appeals Office, Room 6, Mostaza y Pan’s owners Christian Galdeano and Liliana Galdeano were extradited to the National Criminal and Correctional Court No. 12 in a case in which they were dismissed. Complaints made with allegations of irregularities in the profitability amounts in dealerships and investment processes where tenants have to make 2 to 2.5 times more than budgeted.

The complainants explained that it was very difficult to rent the property of the Galdeano brothers, taking into account that the promised time period for the Mostaza owners to get back the investment is between 28 and 36 months. The truth pointed out that it could not recover even in 7 years with two pandemics.

Legal action against brothers who own Mostaza

They also added that they had to take input from Mustard and Bread, which recorded over 40 percent of the market. “They make you invest (in the process they make you spend twice as much so you get them in debt); they buy machinery from them, they’re the only ones with the rest of the trim and furnishings, they tell you where it is. you start the business, you buy your stuff where they tell you (very expensive compared to the market), You pay the logistics, the rent and you have to see if everything looks empty. The balances come out with an unrealistic profit”, commented. A victim taking legal action against the Galdeano brothers.

The Chamber’s decision to return to the first judicial authority and deepen the investigation, taken almost in May, triggered evidence measures.

“The Public Prosecutor’s Office has to take into account the situation as a whole and all circumstances constituting an acquittal or a crime. As Roxin points out in the case-law, “defensive circumstances should also be investigated” (..) “The prosecution has to learn the facts; “He needs to collect both the charges and the eviction elements with the same effort,” he said.

“Based on what has been examined, we will cancel the prosecutor’s opinion and the judgment as it is the necessary conclusion… Despite this, and without a value judgment on the merits, it is not possible to reject the criminal hypothesis put forward by the complainant, at least for now, so point out that the temperament adopted by the previous instance judge is premature”.

How is the investigation of this Mustard series going?

One of those affected commented that when the owners of Mostaza were told they would not be able to get the investment back in 7 years, “they told you to stay calm and we don’t know how to run the business”.

“You’re hostile if you make such a claim, they take away their delivery platform and when the time comes, they don’t renew the lease, they hold your investment and they start billing the next day.” added. .

Complainants also commented that in judicial cases it was understood that the company’s website mentioned a pool of purchases, and that a soft drink, for example, returned 56.6 percent of what franchisees purchased as advertising. But this “return” was perceived by Mostaza y Pan SA. Not franchisees.

It will now be necessary to deepen the investigation into the complaint, or to see whether Mostaza has given its owners permission to proceed with an eviction case, what measures the first-instance court has or is implementing in line with the directives of the Appeals Chamber. .because leasing agreements expire before franchise agreements.

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