UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

Case No.

KEITH A. CLAYBORNE,

Plaintiff,

vs.

GOLDEN KRUST FRANCHISING, INC.

d/b/a GOLDEN KRUST CARIBBEAN 

BAKERY & GRILL,

Defendant.

/

COMPLAINT

Plaintiff, Keith A. Clayborne (“Plaintiff” or “Mr. Clayborne”), by and through the 

undersigned counsel, hereby sues Defendant Golden Krust Franchising, Inc. d/b/a Golden Krust 

Caribbean Bakery & Grill (“Defendant” or “GK Restaurant”) for damages and declaratory relief 

and alleges as follows:

NATURE OF THE ACTION

This is a case about misrepresentations and lies. The Defendant lied to Mr. Clayborne for 

years on end about a purportedly fair and equitable franchise system that, in actuality, was designed 

to benefit a few “insider” franchisees at the expense of Mr. Clayborne and others. Mr. Clayborne

fell for Defendant’s lies, unfortunately, and suffered significant financial loss.

GK Restaurant sells Caribbean bakery products and West Indian Cuisine. Over the span 

of 10 years, Plaintiff operated several GK Restaurant franchises. Plaintiff recently learned that 

Defendant made false statements to him solely for purposes of convincing him to join the GK 

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Restaurant franchise and pay substantial amounts of fees. As a result of Defendant’s conduct, 

Plaintiff seeks recission of the franchise agreements. 

THE PARTIES

1. Keith A. Clayborne is domiciled in Florida, is a citizen of Florida, and is sui juris. 

2. Golden Krust Franchising, Inc. is a New York corporation and currently maintains 

its principal business address in White Plains, New York. 

3. Plaintiff has retained Lomax Legal PLLC to represent him in this action and is

obligated to pay reasonable attorney’s fees and costs for its services in this matter. 

JURISDICTION AND VENUE

4. This Court has diversity jurisdiction over the claims asserted in this action pursuant 

to 28 U.S.C. §1332 because there is complete diversity of citizenship between the parties and the 

matter in controversy exceeds $75,000.00, exclusive of interest and cost. Plaintiff resides and is 

domiciled in Florida and Defendant is headquartered in New York. This Court also has jurisdiction 

over this action pursuant to 28 U.S.C. § 2201.

5. This Court has personal jurisdiction over Defendant because it engages in 

substantial business activity throughout Florida and this District.

6. Venue is proper in the Southern District of Florida pursuant to 28 U.S.C. §1391(b)

because all the events giving rise to this claim occurred in this District, and Plaintiff’s GK Restaurant 

franchises were located in this District.

GENERAL ALLEGATIONS

7. Plaintiff acquired his first GK Restaurant franchise in 2006 under the false 

premise that he was entering into a fair and equitable franchise.

8. Plaintiff, after relying on GK’s misrepresentations, acquired six other GK 

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Restaurant franchises throughout South Florida.

9. Members of the Clayborne family, including Plaintiff’s wife and sons, have also 

owned or managed entities that acquired various GK Restaurant franchises throughout South 

Florida.

10. In total, Plaintiff and his family have owned or managed entities that acquired

twelve GK Restaurants in South Florida.

11. On or around February 6, 2006, Mr. Clayborne and 7 “K” Corp., a since dissolved 

entity, entered into their first franchise agreement with Defendant to operate a GK Restaurant at 

5967 Oakland Park Blvd. Lauderhill, Florida (the “Lauderhill Franchise Agreement”). See 

Lauderhill Franchise Agreement attached as EXHIBIT A.

12. In 2007, Mr. Clayborne and 7 “K” Corp., a since dissolved entity, entered into 

two franchise agreements with Defendant to operate a GK Restaurant at 1354 S. SR7 North

Lauderdale, Florida (the “North Lauderdale Franchise Agreement”) and in Coral Springs, Florida 

(the “Coral Springs Franchise Agreement”). See Coral Springs Franchise Agreement attached as 

EXHIBIT B.

13. On or around April 17, 2010, Mr. Clayborne and 7 “K” Corp., a since dissolved 

entity, entered into a fourth franchise agreement with Defendant to operate a GK Restaurant at 178 

Miramar Square Miramar, Florida (the “Miramar Franchise Agreement”). See Miramar Franchise

Agreement attached as EXHIBIT C.

14. On or around December 28, 2015, Keith and Bernadette Clayborne and Golden 

Krust #6, LLC, a since dissolved entity, entered into a fifth franchise agreement with Defendant to

operate a GK Restaurant at 5299 N. State Road 7 Tamarac, Florida (the “Tamarac Franchise

Agreement”). See Tamarac Franchise Agreement attached as EXHIBIT D.

15. On or around April 11, 2016, Mr. Clayborne and Golden Krust #6, LLC, a since 

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dissolved entity, entered into a final franchise agreement with Defendant to operate a GK 

Restaurant at 801 E. Commercial Blvd. Oakland Park, Florida (the “Oakland Park Franchise

Agreement”). See Oakland Park Franchise Agreement attached as EXHIBIT E.

16. In addition to the franchise agreements between Plaintiff and Defendant, Plaintiff 

was required to review and agree to the terms of Defendant’s Financial Disclosure Document (the 

“FDD”) which were incorporated in the franchise agreements by reference. 

17. The franchise agreements state, in relevant part:

You acknowledge that you have read this Agreement and our Franchise 

Disclosure Document and understand and accept the terms, conditions, and 

covenants in this Agreement...[and that]

adherence to the terms of this Agreement, prescribed for the purpose of maintaining

a uniformly high standard of product and business quality, is of mutual 

importance.

See Exs, A-E at §I. A. (emphasis added). 

18. Further, the franchise agreements explicitly refer to the yearly FDDs and state that 

“[n]othing in this [a]greement or any related agreement is intended to disclaim the franchisor’s 

representations made in the Franchise Disclosure Document.” See Exs, A-E at §XVII. H.

19. Since 2006, when Plaintiff acquired his first GK Restaurant franchise, he has

operated his franchises professionally, which earned him recognition from Defendant.

20. Plaintiff and his family were often cited in Defendant’s marketing materials,

which referred to the Clayborne family as having the “golden touch.” See GK Magazine Article 

attached as EXHIBIT F. 

21. More specifically, a magazine article quoted then President and CEO, Lowell 

Hawthorne, stating that the Clayborne family has “work[ed] hard to provide GK’s gold standard 

service, food quality and ambiance to South Florida residents and have done an outstanding job 

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representing the brand.” Id. 

22. Additionally, in September 2017, Defendant wrote an email praising Plaintiff and 

his wife, Bernadette Clayborne, for their trust and commitment to the Golden Krust brand. The 

email states:

To the prolific Clayborne family:

Congratulations on another Golden Krust location. Your continued expansion is a 

reminder that Golden Krust is bigger than any one of us, individually. We thank 

you for your continued faith in the brand and trust in us as a company. We greatly 

appreciate how you have served as ambassadors of Golden Krust in the Florida 

market. We look forward to a fruitful relationship, and much success at this new 

location. Be well and take care.

See e-mail from Daren Hawthorne to Keith and Bernadette Clayborne, attached as

EXHIBIT G. 

23. Due in part to the number of GK Restaurant franchises acquired by Plaintiff and 

his family and their level of professionalism and service to customers, Golden Krust became a 

household name among members of the Caribbean community, and others, residing in South 

Florida.

24. Yet, even though Plaintiff and his family had contributed significantly to the 

Golden Krust brand, it was later revealed that Defendant had been deceiving Plaintiff and engaging

in practices that significantly undercut profits for Plaintiff’s franchise restaurants.

25. In or around late 2020, Plaintiff learned for the first time of Defendant’s ongoing 

discriminatory pricing and fee schemes that favor a select number of franchises owned by “certain 

principals and related family members of Golden Krust” (“Family-Owned Franchises”) that are 

separate and distinct from corporate owned stores. See, e.g., 2015 Franchise Disclosure Documents 

(“2015 FDD”) at 10 and attached as EXHIBIT H.

26. Pursuant to the franchise agreements between Plaintiff and Defendant, and the

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FDDs provided to Plaintiff over the years, Plaintiff is required to purchase food products – the 

lifeline of the GK Restaurant franchise – from Defendant or a third-party entity approved by 

Defendant. 

27. Item 8, Restriction on Sources of Products and Services, of the FDDs, state, in 

relevant part that: 

“In order to maintain the quality of the goods and services sold by Golden Krust 

restaurants and the reputation of the Golden Krust franchise network, you are 

obligated to purchase all Jamaican patties, jerk seasonings, jerk sauce, jerk chicken 

and substantially all of your breads, cakes and other baked goods from a GK 

affiliate, Golden Krust Bakery, Inc...[Y]ou are obligated to purchase all other food 

or restaurant products from sources designated by Golden Krust. 

See, e.g., 2011 FDD at 19 and attached as EXHIBIT I.

28. Further, Item 5, Initial Fees, of the FDD requires all newly acquired franchises to 

purchase “adequate opening inventory [food products]” from Defendant. Id. at 11.

29. Unlike franchisees such as Plaintiff, Family-Owned Franchises and other selected 

franchises have been allowed to purchase required food products directly from Golden Krust 

Caribbean Bakery, Inc., an affiliate, at a reduced cost. 

30. Yet, Plaintiff had to purchase the same food products from an approved thirdparty vendor at a higher price. 

31. Court documents, filed in Golden Krust Franchising, Inc. v Auctus Restaurant 

Group, Inc. et. al Case No. 7:20-cv-07321-KMK (November 2020) in the Southern District of 

New York, revealed that Defendant has acknowledged the discriminatory pricing regarding food 

products in e-mails and other documents.

32. In the above-referenced case, Defendant was unable to articulate any legitimate 

business interest to justify allowing Family-Owned Franchises to purchase food products from its 

affiliate while forcing other franchise owners to purchase from a third-party vendor at a higher

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price.

33. In addition to its discriminatory pricing scheme related to food products, 

Defendant has also been engaged in other discriminatory pricing practices that benefit FamilyOwned Franchises at the expense of other franchise owners such as Plaintiff.

34. Defendant’s FDDs state that all franchise royalty and advertising fees are 

uniformly imposed by and payable to Golden Krust. See, e.g., 2011 FDD at 12.

35. Nonetheless, for the years Plaintiff operated his GK Restaurant franchises, 

Defendant failed to uniformly impose these fees across the franchise system. 

36. Family-Owned Franchises and other selected franchises received an unfair 

advantage in the form of reduced royalties and no advertising fees. 

37. Court documents have revealed that Family-Owned Franchises paid $250.00 per 

week for royalties regardless of gross sales and Family-Owned Franchises in South Florida did not 

pay advertising fees. 

38. However, Plaintiff had to pay 3% of gross sales in royalties and was required to 

pay 1% of gross sales for advertising fees for each franchise. 

39. Additionally, because Family-Owned Franchises did not pay advertising fees, 

Plaintiff and other similarly situated franchisees bore the full cost for all advertisement activity in 

South Florida. 

40. Despite this fact, Plaintiff received less visibility in marketing and advertisements 

for his franchises. 

41. To move inventory, remain competitive, and stay in business within the South 

Florida market was nearly impossible due to Defendant’s unfair pricing scheme, which purposely 

created a competitive advantage for Family-Owned Franchises at the expense of Plaintiff and 

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others similarly situated.

42. Plaintiff’s profit margin was significantly reduced because of Defendant’s 

discriminatory practices. 

43. Though Plaintiff exercised reasonable care and due diligence in seeking to 

discover the facts that form the basis of this claim against Defendant, Defendant’s deceptions and 

procedures used to shield its deceptions proved more successful.

44. Defendant was able to successfully conceal its discriminatory pricing and fee 

schemes for the years Plaintiff operated a GK Restaurant franchise through November 2020, when 

Plaintiff learned this information from the lawsuit filed in the Southern District of New York.

45. As such, Plaintiffs did not know, and could not have reasonably known, the facts 

that give rise to this claim against Defendant until November 2020.

COUNT I

Declaratory Judgment

46. Plaintiff adopts and realleges the allegations contained in Paragraph 1 – 45 as if 

fully set forth herein.

47. Plaintiff and Defendant entered into the Lauderhill Franchise Agreement, the Coral 

Springs Franchise Agreement, the North Lauderdale Franchise Agreement, the Miramar Franchise 

Agreement, the Oakland Park Franchise Agreement, and the Tamarac Franchise Agreement 

(collectively, the “Franchise Agreements”), all of which have an arbitration clause that includes the 

following language: “the arbitrator will not have the right ... to award exemplary or punitive 

damages.”

48. There is a substantial question that must be resolved with respect to whether the 

Franchise Agreements’ arbitration clause is enforceable in light of its prohibition of an arbitrator’s 

ability to award exemplary or punitive damages, which are available under both Florida and New 

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York law.

49. Courts have held that an arbitration agreement that contains remedial restrictions 

and no severability clause is unenforceable.

50. Accordingly, Plaintiff seeks a judicial determination of its powers, privileges, and 

rights with respect to the potentially unlawful arbitration provisions in the Franchise Agreements.

WHEREFORE, Plaintiff respectfully requests an Order declaring the arbitration 

clause in the Franchise Agreement invalid and unenforceable.

COUNT II

Fraudulent Inducement

51. Plaintiff adopts and realleges the allegations contained in Paragraph 1 – 45 as if fully 

set forth herein.

52. Prior to the parties executing the Franchise Agreements, Defendant falsely 

represented to Plaintiff through the FDDs that “[a]ll fees are uniformly imposed by and payable to 

Golden Krust.” See, e.g., 2010-2018 FDDs at § Item 6.

53. Defendant knew at the time that it represented to Plaintiff that “[a]ll fees are 

uniformly imposed by and payable to Golden Krust,” that it did not uniformly impose such fees.

54. In November 2020, Plaintiff learned for the first time that Defendant was not 

imposing royalty and advertising fees in a uniform manner. 

55. Court documents revealed that Family-Owned Franchises paid $250.00 per week 

for royalties regardless of gross sales and Family-Owned Franchises in South Florida did not pay 

advertising fees.

56. At the time Plaintiff entered into the Franchise Agreements, Defendant was aware 

of the material misrepresentation in the FDDs and intentionally provided that information to 

Plaintiff. 

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57. Defendant used this material misrepresentation to convince Plaintiff to enter each 

of the Franchise Agreements.

58. Plaintiff signed the Franchise Agreements in reliance upon Defendant’s material 

misrepresentation.

59. But for Defendant’s material misrepresentation, Plaintiff would not have entered 

the Franchise Agreements.

60. As a result of Defendant’s material misrepresentation, Plaintiff suffered significant 

economic damages.

WHEREFORE, Plaintiff respectfully requests that this Court enter an Order rescinding the 

Franchise Agreements.

DEMAND FOR JURY TRIAL

Plaintiff further demands a trial by jury of all issues so triable.

Dated: October 30, 2022

Respectfully Submitted,

/s/ Akivia P.A. Bassaragh

Akivia P.A. Bassaragh Esq.

Florida Bar No. 84880

Akivia@LomaxLegal.com 

/s/ Christopher M. Lomax__

Christopher M. Lomax Esq.

Florida Bar No. 56220

Chris@LomaxLegal.com

LOMAX LEGAL PLLC

95 Merrick Way, 3rd Floor

Coral Gables, FL 33134

Telephone: 305.582.6506

Facsimile: 305.503.6897

Counsel for Plaintiff 

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