Praxia Nathanael, the former owner of the franchise and her husband Stelio, who is not listed as an owner as he is sequestrated, claim that Taste has not complied with a number of substantive conditions in the agreement. They have cancelled the sale agreement and have issued summons in this regard.

Taste CEO, Carlo Gonzaga, maintains that all of the conditions have been met. ‘‘We paid R45m in cash for this business. We have assumed full operational control and the business is totally integrated into the operations of Buon Gusto, our subsidiary.’’

Gonzaga maintains this is an attempt on the part of the Nathanaels to renegotiate the terms of the contract. ‘‘We have tried to settle this matter, but it has reached the point where we have a duty to protect our interests. We will defend the action and will file a counterclaim. We are not returning this business and we are not renegotiating the contract.’’

According to Saul Shoot a director at Fluxmans Attorneys, and attorney for the sellers, Taste did not get Competition Commission approval for the deal, as was required; nor did Taste get board and shareholder approval for the deal. ‘‘These were some of the suspensive conditions that were not met’’.

In addition, Shoot says that Taste did not handle a dispute that arose in accordance with the contract. A dispute arose in regard to the set-off account, which consists primarily of deposits paid by prospective franchisees to the sellers. ‘‘It was only after we threatened legal action that Nathanael put the franchisees money into a trust account’’, says Gonzaga.

However Shoot argues that the issue was not referred by Taste correctly, thus breaking the terms of the agreement. ‘‘Whichever way you look at it, there is no agreement. They are caretaking our business on our behalf.

We have sued for our business back and for damages.’’
Industry observers maintain that Gonzaga should have been careful about the people he does business with.

Stelio Nathanael is associated with a variety of business initiatives, but one in particular, Propvestor, went horribly south and was ultimately liquidated in 2007.

Franchisees accused him of defrauding them and he was arrested on six counts of fraud.
  –  sasha@moneyweb.co.za